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Business Law Chapter 12

Business Law Chapter 12 - Business Law Chapter 12...

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Business Law Chapter 12 Consideration A Bargain and Exchange - Consideration is required element of any contract. o Consideration – means that there must be bargaining that leads to an exchange between parties. o Bargaining indicates that each side is obligating itself in some way to INDUCE THE OTHER SIDE TO AGREE. - Generally a court will only enforce one side’s promise if the other side offered a promise in exchange. Without mutual exchange of obligations, there is no deal. - Consideration CAN BE ANYTHING SOMEONE MIGHT WANT TO BARGAIN FOR. o Promisor – person who makes the promise o Promisee – person to whom a promise is made - Courts will try to determine whether the promisee should be able to enforce the promise and the decision depends upon whether the promise gave consideration. - THE THING BEING BARGAINED FORCAN BE ANOTHER PROMISE OR ACTION. o Usually it is a promise – the promise is the consideration making it enforceable - it creates a bilateral contract - The thing bargained for can be an ACTION, rather than a promise. o Ie: if you plow my driveway, ill give you $150. You plow driveway, your work is consideration. The offer seeks and action – plowing driveway. - THE THING BARGAINED FOR CAN BE A BENEFIT TO PROMISOR OR A DETRIMENT TO PROMISEE o Look at diagram page 282 - The THING BARGAINED FOR CAN BE A PROMISE TO DO SOMETHING OR A PROMISE TO REFRAIN FROM DOING SOMETHING. o A tell you not to buy a shop for $30,000. Your promise not to buy a shop is consideration. Case pg 283 Adequacy of Consideration
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- Courts WILL SELDOM INQUIRE INTO ADEQUACY OF CONSIDERATION. - The question of adequacy is for parties as they bargain not for the courts. Mutuality of Obligations Illusory Promise - If A offers to sell you bike for $200. You say that you will look at it, and if you like it then you will buy it in the morning. IF you go to A’s house and give the money, A CAN refuse to sell you
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