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11 Cards in this Set

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The inducement to enter into a contract; If no consideration, promise is not legally enforceable under contract law

2 Elements for Consideration

1. Legal sufficiency

2. Bargained-for exchange

Legal Sufficiency

A legal benefit to promisor or a legal detriment by promissee

Bargained-for Exchange

An act done in the past (past consideration) is not consideration for a present promise

4 Situations where lack of Consideration makes Promise UNENFORCEABLE

1. Gratuitous Promises (Gift)

2. Past Consideration

3. Promissee has a prior legal duty (under statute) to perform promise

4. Contract Modification (under contract)

Gratuitous Promise

A promise to make a gift; No enforceable rights because no consideration

Past Consideration

An act done before the contract is made is not consideration

Promissee has a prior legal duty (under statute) to perform its promise

Ex: Joe will pay policeman $500 to catch guy who stole his TV.

The policeman cannot accept this because there is no consideration. Policeman has a prior duty to catch criminals. (His job)

Contract Modification (Common Law)

A contract modification must be supported by mutual consideration; i.e. both parties must be doing something new.

Contract Modification (UCC)

a contract modification can be modified without new consideration; i.e. both parties must be acting in GOOD FAITH

Promissory Estoppel (Consideration)

Under modern contract law, the consideration requirement does not need to be satisfied if promissory estoppel applies