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Contracts
University of Kansas School of Law
Drahozal, Christopher R.

I. Bases for Enforcing Promises                                                                                   
 
A. Consideration – an act bargained for and given in exchange for a promise
 
Restatement §71: Consideration is a bargained for exchange.
To be bargained for, must be sought by promisor in exchange for promise and given by promisee in exchange for promise
May seek performance or return promise
 
Car Selling Hypo:
3 Interests:
Expectation: promisee should be in the same position as if the contract were performed
Promisee receives what is promised to him
Reliance: promisee should be the position as if the contract had not been made
Promisee receives what he started with + expenses in preparation + lost opportunities
Restitution: promisor should be in the position as if the contract had not been made
Promisor conferred a benefit on the promisor
Restitution will never be larger than reliance, but may be identical
 
Why do we hold people responsible for keeping contracts:
Morally, we should hold people accountable for their promises, but there are exceptions
Promote exchange, allows people to trade and to specialize instead of being self-sufficient
Contract law provides “a framework of reasonably assured expectations”
Perhaps is not necessary for simple trades, but allows people to enter into longer and more complicated transactions
 
 
Fundamentals of Consideration
a.       HAMER V. SIDWAY: “if you refrain from drinking, using tobacco, swearing, playing cards/billards for money until you are 12, I will pay $5000”
a.       Unilateral promise
b.      Uncle is bound by his promise to pay nephew $5000
c.       Giving up a legal right at the request of another party is sufficient consideration for a promise
                                                                                       i.      Would not have worked under old benefit/detriment theory. Nephew only benefited. But this is no longer used
d.      Courts do not second guess people’s bargains to decide what is fair
b.      Gratuitous Promises
a.       Promises to make gifts are not enforceable – no consideration
c.       Peppercorns
a.       Consideration that is of trifling value – not consideration
d.      FIEGE V. BOEHM: Forbearance from filing bastardy charges, even though she wasn’t pregnant, was consideration since they believed pregnancy to be real.
a.       Forbearance based on an invalid claim may be consideration if the party forbearing reasonably believes the claim to be well founded
b.      Forbearance is not conside

efense if there is a good faith basis – it is up to client to choose whether to make the argument or not. Cannot represent the client and choose not to raise a defense that is available
 
Requirement of a Bargain
a.       Unsolicited action is not consideration – must be trying to induce someone to do something
b.      Illusory promises are not consideration
c.       KIRKSEY V. KIRKSEY: “if you come here and see me, I will let you have a place to raise your family” Moving not consideration, brother’s promise was a mere gratuity
a.       No bargained for exchange – but maybe it should have been
d.      Other examples:
a.       Consideration when an estranged father buys daughter a ring if she meets him at Tiffany’s – purpose was to get her to meet him, not to make a gift
b.      No consideration when a man promises a tramp he will buy him a coat if the tramp walks around the corner to the store – viewed as a gift, not enough for a bargained for exchange
e.       Look at what promisor is seeking/inducing promisee to do