Friday, October 15, 2010
3:06 PM
Brubaker_Contracts_Fall_2010
Consideration (Defined in terms of bargain)
· Something is bargained for if it is sought by P’or in exchange for his P and given by P’ee in exchange for that P. This requirement is met so long as at least one of the reasons the P/perf was made/given was to induce the return P/perf. So long as there is C, courts generally don’t inquire to the “adequacy” of that C
· Must be more than a pretense of bargaining (peppercorns) parties must have actually bargained
· C may move from P’or to a 3rd party(that’s not the P’ee), or from P’ee to a 3rd party (that’s not the P’or)
No Consideration:
1. Exchange Lacking- Gratuitous Ps- P’or’s P not supported by C because no exchange, he received nothing in return (unenforceable unless he completed the gift – cautionary/evidentiary)
2. Conditional Gift Ps- In making the P, the P’or’s purpose is not to obtain the action, but simply to make a gift (i.e. I’ll give you a gold watch if you come by my office)
· Was one of the reasons P’or made P was to induce return P’ee’s perf/P?
· Would the P’or benefit from the exchange?
3. Exchange but no Bargain- Two Categories:
· P’or was not seeking to induce action taken by the P’ee
i. Past Consideration (P’ee had already taken action at the time the P was made)
· Exception: see Promissory Restitution
ii. Unsolicited Action
· P’ee’s action was not induced by the P (generally P’ee acted in ignorance of the P)
i. Rewards (Unilateral) O’ee learns of O after partial perf may accept by completing perf
ii. Cross Offers- Parties independently send P’s which propose an identical agreement that cross each other in transmission, neither gives a P in exchange for the other, so no C/no K
iii. Ps During Employment At-Will: (E’or/E’ee makes P and employment continues)
· E’ee Handbook(E’ors P) or E’ee P not to compete generally upheld if employment subsequently continues (one of the reasons E’or didn’t fire or E’ee didn’t quit was because of the P) (courts generally averse to inquiring into purpose)
4. Illusory Promise- If P’or reserves alternatives – unless each would be C if bargained for (actual Perf may not be sufficient if the P’ee was looking for a P to Perf)
· Illusory P may still have legal effect (i.e. A seller’s P to sell all the goods the buyer chooses to buy= an O which can be A by the buyer placing an order – the O could be revoked at any time)
· Mere requirement of giving notice of termination may be enough to keep a P from being illusory
Court reads in consideration
· Satisfaction Clause: Without reading in an implied P, the transaction cannot have such business efficacy that both parties must have intended it to have
1. Objective- If subject matter is capable of being viewed objectively (goods/commercial standards) we may use a reasonable efforts standard (i.e. exclusive sale of goods Ks/Ks contingent on the P’ee being able to obtain a mortgage)
· UCC 2-306(2)- Exclusive dea
ed to reliance as “justice requires”
· Big gap between reliance and expectation courts generally go with reliance because it is a better indicator of actual injury caused by P’ee
· Evil P’or, then probably exp damages
· The stronger the case the more likely exp damages
· Remedy should not put P’ee in a better position than he would be in had the P been fully perf
· Family context is one of the areas where courts have traditionally enforced gratuitous Ps based on reliance
· But For Causation standard
Restitution
1. Receipt of benefit (unless benefit was conferred officiously, gratuitously, or it is not measurable)
2. Unjust for that party to keep it without compensating other party
· No restitution for “officious intermeddler”
i. Was there a reasonable opportunity to decline?
ii. Was there an excuse for not offering/asking? (honest mistake?)
iii. Was the service rendered gratuitously? (no expectation of compensation)
· Family/personal context- there is a presumption of gratuitousness
· Usually emergency services are gratuitous
· Exception is when the services are excessively expensive/burdensome
