Contracts I Course Outline – Ricks
CONSIDERATION: CONTRACT AND BARGAIN
a. Common law of contract, the plaintiff needs to only show 3 things: Consideration, Promise, and Breach of Promise
B. Consideration Theory and Policy
a. Recompense: helps decide which contracts we enforce
b. Nude Contract: Where one makes bargain of sale without recompense
c. Nude Promise: Where one promises and nothing is assigned for the promise
d. No action lies in these cases and they cannot be enforces.
a. Past consideration is no good. Promisor must first promise something, and then receive consideration.
b. Gifts are not consideration.
c. Promise and consideration must purport each other; its not enough that the promise induces the detriment or that the detriment induces the promise if the other is wanting.
d. BORELLI v BRUSSEAU: Personal performance of personal duty created by marriage does not constitute consideration b/c the spouse rendering services has pre-existing duty to take care of husband. If she wanted an enforceable contract then she would have had to give something of hers to him in exchange for something of his, b/c of prenup. Or he could setup a trust or will for her.
Restatement 71: Req. of Exchange; Types of exchange
A. To constitute consideration, a performance or a return promise must be bargained for
B. A performance or return promise is bargained for if it is sought by the promisor in exchange for his promise and is given by the promisee in exchange for his promise.
C. Performance may consist of
1. An act other than a promise, or
2. a forbearance, or
3. the creation, modification, or destruction, of a legal relation.
D. The performance or return promise may be given to the promisor or to some other person. It may be given by the promise or by some other person.
D. Proper Form
Consideration is required to be in certain form: Benefit or detriment or mutual promise. Consideration is present exchange bargained for in return for a promise. It can consist of eit
t he/she at least has a questionable right to act rather then to forebear.
C. Forbearance to assert or the surrender of a claim or defense which proves to be invalid is not consideration unless:
1. The claim or defense is in fact doubtful because of uncertainty as to the facts of the law.
2. The forbearing party believes that the claim or defense may be fairly determined to be valid.
D. UCC 1-207, 3-104, 3-311 Performance or Acceptance Under Reservation of Rights.
1. A party who, with explicit reservation of rights performs or promises performance or asserts to perform in a manner demanded or offered by the other party does not thereby prejudice the rights reserved. Such words as “without prejustice”, “Under protest”, or the likes are sufficient.
Subsection (1) does not apply to accord and satisfaction.