Contracts Outline
I. Consideration (every contract must have consideration to be enforceable)
a. § 71: The Requirement of Consideration
1. Has the Promisor made a Promise to the Promise?
2. Is a return promise or performance being sought?
i. an Act
ii. Performance or
iii. Change or creation of a legal relationship
3. Did the Promisor make his Promise inorder to obtain the return promise or performance from the promise?
4. Did the Promissee give his or her return promise or performance inorder to obtain the return promise
Bargain for Exchange = Consideration
b. § 81: Consideration as motive or inducing cause
1. The fact that a promise does not of itself induce a performance or return promise does not prevent the performance or return promise from being consideration for the promise
Peppercorn: a token payment use in exchange to create consideration (1$ in exchange for a car to create consideration and make the giving of the car a legally enforceable contract verse a gift)
– not considered consideration any more but the courts will not make a judgment on whether or not a good deal was made
c. § 79: Adequacy of consideration; mutuality of obligation
1. If the requirement of consideration is met there is no aitional requirement of:
i. a gain, advantage or benefit to promisor or a loss, disadvantage, or determent to the promissee
ii. Equivalence in values exchanged
iii. mutuality of obligation
Employment Agreements:
An employee AT WILL can be fired for any non-discriminatory reason
An employee that can only be discarded WITH CAUSE- whether in an employee handbook or your contract indicated cause.
i. Handbooks: Technically in a handbook there is no bargain for exchange therefore there is any consideration, even if the employer promises to follow the rules there is no promise or performance sought by from the employee by the employer.
In this case as with the other employment case courts tend to find some sort of consideration by looking beyond the scope of the actual agreement.
Example:
Court rules that there is consideration because:
They were continually promoted, received bonuses ect.
Agreement was signed shortly after hiring
They were still employed and as at will employees CAB could have fired them at any time
That a covenant signed shortly after hiring is a continuation of the employment contracts
Non- competition Agreements:
Problem with determining consideration with non-competition covenants:
The employer, in the contract itself, never makes a promise of employment, if we review a contract the moment it is made than the fact that employment continued can not make this consideration because we are forced to look beyond the timeframe that the agreement was made
Doesn’t fulfill 71 (4) did the promisee make his or her return promise or performanc
the enforcement of the promise (did the promisee act to their detriment in relance on the promise of the promissor?)
2. § 86: Promise for the Benefit Received:
i. A promise made after a performance (I promise to pay you 500$ for taking care of my son) is binding to the extent necessary to prevent injustice
a. not binding if:
1. performance was a gift
2. value is disproprtianate to the benefit
Quasi contracts arise not form consent as a tradition contract does but from a need for remedy and a notion of natural and just equity.
Three elements required with regard to a quasi contract:
1. The defendant was enrichment (received a benefit from the Plaintiff)
2. Retention of the benefit without payment would be unjust
3. The Plaintiff expected payment from the Defendant when the benefit was conferred.
Recovery under Quasi contract will be denied if:
1. Benefit was conferred officiously (some sort of interference in the affairs of others that was not justified)
