Chapter 11 Notes - 1

Chapter 11 Notes - 1 - • Preexisting duty does not...

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Ch. 11 Consideration – value given in return for a promise. Requires legal value and bargained-for exchange Legal value 1. Promise to do something that one has no prior legal duty to do 2. Performance of an action that one is otherwise not obligated to undertake 3. Forbearance – refraining from an action that one has a legal right to undertake o Hamer v. Sidway : Nephew refrained from pursuing harmful habits and was promised $5,000. Nephew won the case Bargained-for exchange o Promisor must incur a legal detriment either now or in the future. Distinguishes contracts from gifts Legal Sufficiency and Adequacy of Consideration Legal sufficiency – requires consideration to be something of value in the eyes of the law Adequacy – involves “how much” consideration is given o May help determine if a contract is so one-sided that it is unconscionable Contracts that Lack Consideration
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Unformatted text preview: • Preexisting duty: does not constitute legally sufficient consideration o Unforeseen difficulties: courts will sometimes allow exceptions to the preexisting duty rule o Rescission – a remedy whereby a contract is cancelled and the parties are returned to the positions occupied before the contract May be effected through mutual consent, parties’ conduct, court decree • Past consideration – an act that takes place before the contract is made, cannot be consideration for a later promise o Noncompete agreement – employee agrees not to work for competitors of the employer after employment relationship Access Organics, Inc. v. Hernandez : Noncompete agreement was considered invalid due to lack of consideration • Illusory promises – unenforceable promise with no bargained-for consideration o Gifts...
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