CLASSIC CONSIDERATION.. 2
FORMAL CONSIDERATION.. 4
PROMISSORY RELIANCE. 6
STATUTE OF FRAUDS. 9
ILLUSORY PROMISE. 11
MODIFICATIONS. 14
REMEDIES. 16
ASSENT. 34
FORM CONTRACTS. 40
REVOCATION.. 43
ACCEPTANCE. 46
PAROL EVIDENCE RULE. 49
MISTAKE. 52
SUBSTANTIAL PERFORMANCE & PERFECT TENDER RULE. 61
EXPRESS CONDITIONS. 63
BREACH AND RESPONSE. 67
CLASSIC CONSIDERATION
9/2/03
Class Notes
Contract is a promise or a set of promises for the breach of which the law gives a remedy.
A promise is a manifestation of intention to act or refrain from acting in a specified way.
Requirement of bargain or consideration or exchange.
Rawls – Principle of fairness. Obligated to rules of institution if one benefits from that institution. Promises stabilize schemes of cooperation, especially transactions. Take place of coercive arrangements. Promises self-imposed in order to advance ones ends. Keeping a promise affirms the practice of promising allowing for future transactions. In our benefit to keep them.
Scanlon – At some point potential promisees become promisors and so it is in everyone’s benefit to keep a promise unless other principles dictate breaking it or if it was gained through deceit or coercion.
Gardner – Four categories. 1 Torts: ought to pay for losses. 2 Bargains: ought to pay seller the price agreed. 3 Promissory: promises binding in their own right. 4 Quasi-Contractual: anyone who receives something not as a gift ought to pay for it. 1 and 4 corrected if things go unjustly. 2 and 3 should dictate transactions and be settled before they start.
Donative Promises – Made for affective reasons (love or friendship)
Dougherty v. Salt – CB 6
Facts – 8 year old boy received testatrix for $3000 from his aunt. Guardian (plaintiff) says he drafted note at aunt’s request. Aunt presented note as a gift to help the child who she thought was good and deserving of reward. Witnesses for plaintiff presented strongest disproof of consideration.
Procedure – Appeal of an appeal of original trial in which judge presented the question of consideration; jury found in favor of plaintiff; ruling thrown out by judge. First appeal found consideration and overturned judgment. This appeal reinstated judgment on grounds of no consideration.
Rules – Consideration: something of value received (a promise). Voluntary gifts not owed are not enforceable, no matter how labeled.
Decision – No consideration found. Note was a voluntary and unenforceable promise of an executory gift (something to be received in future or after something happens). Child was not a creditor (someone owed something). This was a gift, not a repayment.
Issues – Voluntary promises of gifts not owed are not enforceable, no matter how labeled. Promise of future gift unenforceable. Gift once received cannot be taken back.
Class Notes –Narrow consideration means a bargain, receiving something in return for a promise. This is sufficient, but not necessary.
Intermediate court felt note stating “value received” is enough to establish consideration. Final court ruled that the letter of the word isn’t enough, the gift must be intended as such.
No bargain because nothing was exchanged, the benefactor didn’t receive anything. So this is a gift, not a contract. The gift is enforceable if future actions are required to receive it. In this case actions have already been done. It wasn’t bargained.
Determine consideration (bargain) if it is plausible to imagine the receiver isn’t interested, that the promisor might up the ante.
Gift as a bargain is hoping to induce behavior.
Reasons for not enforcing bare gift
s) can constitute consideration.
Class Notes –
Had he made a payment, he would not have been able to get it back. If in exchange for a party not filing suit you do something, it used to be consideration only if the claim had grounds. Sometimes matters if they just thought they had a claim.
Seal used to be enough for a consideration. The act of sealing is formal procedure and seems to remove element of rashness (get was, melt wax, pour wax, press wax).
Option Contract is an enforceable agreement to keep an offer open. Valid firm offer (one that is still enforceable).
Offer is like a conditional promise. Can be withdrawn until accepted. Not really different in applicable legal practices.
Firm Offer is an offer that is promised (assured) to be kept open for a certain amount of time.
Have to get consideration for the promise to keep it open. Form is enough in option contracts to establish consideration.
Bad bargains you can’t get out of. Nominal (sham or fake) bargains you can.
Nominal is enough in an option contract because it is hard to say what the worth of the option is, $2 might be sufficient.
Option Contract has to be enforce even if it is a sham: must be written and signed, recites a purported consideration, proposes an exchange with a time period.
Nominal consideration is enough in option contracts and not others because of the context: there is less reason to worry that the option will be held are less than the
