The Basis for Enforcing Promises
Common law actions from early English law
§ Actions made under a seal were enforceable regardless of consideration.
§ Seals had two purposes:
o Evidentiary – proof of the contract itself
o Cautionary – to warn people from entering lightly into the contract, seals carried a certain seriousness with them.
Enforced a promise to repay money because the promisor (debtor) has something belonging to the promisee (creditor).
Recovery for damages based on a consensual undertaking.
§ Misfeasance – promisor does something inconsistent with that undertaking and detrimental
§ Nonfeasance – promisor does nothing (fails to even start what was promised)
Categories of Agreements
§ Contracts for the sale of goods
§ Real estate transactions
§ Construction contracts
§ Employment agreements
§ Family contracts – often lack detail, are informal, often oral, little bargaining, and often motivated from altruism; they are not enforceable many times
Second Restatement §71, Requirement of Exchange; Types of Exchange
“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 his promise and is given by the promisee in exchange for that promise.
3. The performance may consist of
a. an act other than a promise, or
b. a forbearance, or
c. the creation, modification, or destruction of a legal relation.
4. The performance or return promise may be given to the promisor or to some other person. It may be given by the promisee or by some other person.”
Consideration, other contexts– The term is used in a variety of ways, with the meaning changing through time. It has come to mean anything that enforces a promise, such as past consideration or reliance.
Bargain– Consideration is integral to the bargain. It is not enough that two promises exist; one mus
t the forbearance he requested.
Rule: Invalid Claim – Forbearance of a legal right but invalid claim in exchange for a promise to pay is sufficient consideration so long as it was an honest and reasonable belief at the time of the exchange.
Fiege v. Boehm, Md., 1956 (NO BASTARDY PROCEEDINGS, p. 34). Promise for promise. Man agreed to pay medical and other expenses related to the birth of a child plus $10 weekly until the child reached 21 in exchange for the woman’s promise not to proceed with bastardy proceedings. Shortly after the birth, he found out he was not the father and stopped payments. Court said this is irrelevant so long as the woman’s promise was made in good faith, with an honest and reasonable (not absurd) belief at the time. Don’t look at the results, just look at the state at the time the exchange was made.