K Consideration - MBE
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What is the general rule regarding consideration in American K law?
a promise is unenforceable unless it is supported by consideration
What is one consideration problem?
the gratuitous promise
What is a gratuitous promise?
a promise to make a gift...such a promise lacks consideration and is generally unenforceable
What are 4 legal synonyms for "want of consideration"?
- (1) lack of consideration
- (2) no consideration
- (3) not supported by consideration
- (4) insufficient consideration
What is "want of consideration"?
concerns the absence of a bargained for exchange
What is "failure of consideration"?
concerns a party's failure to perform in accordance with his promise; a breach
According to the majority/Restatement rule, a promise is supported by consideration if what?
it is based on a bargained for exchange
The question of whether a particular performance by the PEE constitutes a "detriment" is answered by the application of what test?
the legal detriment test
What is the question under the legal detriment test?
whether the PEE is doing something he had a legal right to do or is foregoing some activity in which he had a legal right to engage
Inadequacy of consideration refers to what situation?
where someone claims he wasn't paid enough consideration for the deal
What is the modern rule regarding the inadequacy of consideration?
courts do NOT police the equivalence or fairness of the exchange for the purposes of applying the consideration doctrine
In some jurisdictions, courts will police the equivalence or fairness of the exchange in what circumstance?
when an element of securing SP is showing that there was a fair or adequate exchange
What is "insufficient consideration"?
there was no consideration for a particular purpose and therefore no bargain
What is "inadequate consideration"?
assumes there was consideration but argues that it wasn't enough making the deal unfair
How may a party be able to defeat the enforcement of an excessively one-sided bargain if courts don't police the fairness of bargains via the consideration doctrine?
defense of unconscionability
What is an illusory promise?
a promise to perform that leaves performance to the discretion of the promising party
Does an illusory promise constitute consideration?
Are gratuitous transfers legally binding and enforceable?
What does it take to execute a gift?
- (1) intent to give a gift
- (2) actual or symbolic delivery
What is the rule regarding false recitals?
the requirement of consideration is not satisfied by a false recital
A minority of courts recognize an exception to the false recital rule where?
when a written option K contains a false recital of consideration the consideration requirement is satisfied
What is a condition on a gratuitous promise?
something a PEE must do to avail herself of the POR's gift but doesn't count as consideration
What are the factors for distinguishing a condition on a gratuitous promise from consideration?
- (1) language of the parties
- (2) context
- (3) benefit to the POR
Is a promise and exchange for something already given/performed supported by consideration?
What are the 2 exceptions to the past consideration rule?
- (1) written promise to pay a debt barred by the SoL is enforceable
- (2) written promise to pay a debt discharged by bankruptcy is enforceable
Under the material benefit test, a promise made in recognition of a past benefit conferred will be enforceable as long as:
- (1) PEE conferred the benefit on the POR and not on a 3P
- (2) the benefit is material
What is an exception or limitation on the material benefit test?
a promise made based on past benefits is NOT enforceable if the benefits were previously contracted for by the POR
What are the 4 requirements for applying promissory estoppel?
- (1) a promise
- (2) foreseeable reliance
- (3) actual reliance
- (4) injustice w/o enforcement
What are the factors used in analyzing the injustice requirement of promissory estoppel?
- (1) strength of proof of the other 3 requirements
- (2) willfulness of the breach
- (3) relative position or equities of the parties
- (4) extent to which the reliance was detrimental
- (5) availability of alternatives short of enforcing the promise
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