A. Consideration:
General Definition: To constitute consideration, a performance or return promise must be bargained for. § 71
2. Bargain for Exchange (BFE)
a. Did the Promise induce the Detriment?
b. Did the Detriment Induce the Promise?
Hamer v. Sidway : Performance as consideration (Testator uncle asks nephew to give up drinkin’ and smokin’
Fiege v. Boehm §74
Forbearance to bring a valid claim is consideration; however, forbearance to assert a claim, which proves to be invalid is not consideration unless the forbearing party believes the claim, may be valid. Even if it later proves to be invalid (Good Faith Belief). Alleged father – mother forbears bastardies charge.
Kirksey v. Kirksey
Gratuitous Promise not enforceable (No BFE)
Sister-in-law travels to brother-in-law’s farm (1840)
Fenberg v. Pfeifer: Past performance not consideration
CAB Inc. v. Ingram: Future performance (Employment is not consideration)
Peppercorn § 79 Adequacy of Consideration (Krull v. Goodman)
Something of little value given in exchange for or to the promissor’s detriment.
May or may not be enforceable, because the BFE is a mere pretense.
Strong v. Sheffield
Illusory promise: A promise is illusory if performance of the promissor is optional (not enforceable).
Mills v. Wyman:(Cared for sick son.) A moral obligation is not enforceable.
Gulf v. Eastern Airlines
Output (requirement) contracts: Promises to buy requirements or sell output are enforceable. The parties must operate in good faith.
B. Detrimental Reliance
Promissory Estoppel § 90
Promise which the promissor should reasonably expect to induce reliance on the part of the promissee; and which does induce such reliance is binding, if injustice can be avoided only by enforcement of the promise. D & G Stout, Inc. v. Bacardi; Ricketts v. Scothorn (none of my grandchildren work”
4 Areas Promissory Estoppel can be used
1) Family Prom 2) Prom to convey land 3) Charitable Subscriptions 4) Prom w/ Grat Bailmts .
C. Restitution
Unjust Enrichment § 87 (2) & § 90
Separate cause of action from K law, since there is no promise involved. A last resort since there are other remedies under K law.
Quasi – Contract: Obligation created by law with regard to assent of bound p
offer and an acceptance.
Offer must be communicated to an identified promissee, who must know of the offer before he can accept (Effect of Misunderstanding § 20)
Price quotations are not offers, unless there is specific language to indicate such (Fairmount Glass Works)
Advertisements: They normally do not constitute offers; but if they contain very specific language (e.g. first come, first served) they may be considered offers (Lefkowitz v. Great Minneapolis Store)
C. Acceptance
Exercise of power conferred upon one party by the offer of another; acceptance creates contractual obligations.
Int’l Filter Co. v. Conroe Gin
D accidentally sends P letter; invitation to negotiation; P relies; D accepts & sends P a $1200 water filter. Manifestation of Assent to the terms made by the offeree in a manner-invited § 50.
Offer can only be accepted by a person whom it invites to furnish consideration § 52
