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University of Mississippi School of Law
Bradley, John R.

Fall 2004
Professor Bradley
I.                  Donative Promises, Form and Reliance
a.      Simple Donative promises
                                                               i.      General rule: Donative promises are generally not enforced
– A gratuitous contract; no bargain; no consideration
1.      promise to make a gift not enforceable, BUT a completed gift is irrevocable
2.      A condition on the promise still does not make it enforceable
3.      A moral obligation to keep a promise is not sufficient ground for concluding that there is a legal obligation to keep the promise.
b.      Element of Form
1.      General rule:  Form alone does not make a contract enforceable
                                                             ii.      Nominal Consideration
1.      General rule: Nominal consideration does not make a promise enforceable
(1)   A “warm glow”
2.      A transaction that has the form of a bargain, but not the substance of a bargain
                                                                                                                                       i.      Promisor did not view what he got as the price of his promise
(a)    Two exceptions: options and guaranties
3.      Classical contract theory generally regarded nominal consideration as enforceable
(1)   As long as it had the form of a bargain it made a promise enforceable
                                                            iii.      Consideration and the Seal
1.      Historically: A promise under seal was enforceable even though donative
2.      Modern: Most states grant seal no legal significance in making document enforceable (by statutory provision)
                                                                                                                                       i.       some states grant varying benefits for having agreement under seal
3.      In most states there is no longer available any legal device that can be employed with certainty that it will bind a promisor to a donative promise
c.      Element of Reliance
                                                               i.      Promissory estoppel
1.      Restatement (2nd) Section 90:
(1)   A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a 3rd person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. 
                                                                                                                                       i.      The remedy granted for breach may be limited as justice requires
– Measure damages as to the extent of reliance
2.      A party that relies on a promise to their detriment sometimes can substitute reliance (R.S. 90) for consideration
3.      Historically: R

                                                                                       i.      No equivalency of values as long as not grossly disproportionate
2.      Restatement (2nd) Section 79
(1)   If the requirement of consideration is met, there is NO additional requirement of:
(a)    A gain, advantage, or benefit to the promisor; or a loss disadvantage, or detriment to the promisee
(b)   Equivalency of the values exchanged
(c)    Mutuality of obligation
                                                                                                                                     ii.      Inadequacy of consideration will NOT void a contract, but duress will void a contract
                                                           iv.      Duress
1.      Restatement (2nd) Section 175
(1)   If a party’s manifestation of assent is induced by an improper threat by the other party that leaves the victim no other reasonable alternative, the contract is voidable by the victim
2.      The “bad” economic situation faced by the party claiming duress must have been caused by the party accused of duress
A hard bargaining position does not constitute duress