Restatement 2 nd of Contracts, § 71 (1) To constitute consideration, a performance or a return promise must be bargained for. (2) A performance or return promise is bargained for if it is sought by the promisor in exchange for her promise and given by the promisee in exchange for that promise. Rule from Fiege? Asserts the claim in good faith, and; Claim has a reasonable basis Pre-Existing Duty Rule Spotting two K P-E duty issues Parties make a first contract (K 1) Parties make a second contract (K2) purporting to revise K1 obligations Basic Rule: No Hold-up Games A party who agrees only to do what that party already was legally obligated to do has given no consideration What is the UCC Article II Rule re modifications? 1.What does 2-209 say?
1. Promise 2. Promisor should reasonably expect to induce action or forbearance 3. Promise does induce such action or forbearance 4. Injustice can be avoided only by inducing the promise Uses of Promissory Estoppel 1. As a substitute for consideration 2. As a substitute for a writing required by a statute of frauds 3. As a way of making bids (offers) irrevocable 4. As a way of policing unfair negotiation behavior Note Guide Chapter 4 o Special rule for charitable subscriptions o Do not require reliance. Generally enforceable even though there is no consideration. A charitable subscription or a marriage settlement is binding under subscription (1) without proof that the promise induced action or forbearance.
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- Fall '06