Contracts I Outline
Part I. What Promises Should the Law Enforce? – The Doctrine of Consideration
I. Chapter 1: An Introduction to Consideration – Donative Promises, Form, and Reliance
a. Contract (“K”): a promise or set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty. Formation of a K requires a bargain in which there is a manifestation of mutual assent to the exchange and a consideration.
b. Bargain: an agreement to exchange
ii. Promise for a performance
c. Promise: the heart of a contract; not all promises are enforceable.
§ A promise obligates someone to do something or not to do something. If the buyer can just walk away from a deal, there is no promise.
d. Agreement: a mutual understanding between two or more persons about their relative rights and duties regarding past or future performances; a manifestation of mutual assent by two or more persons.
e. Consideration: something of value (such as an act, a forbearance, or a return promise) sought by a promisor and received by a promisee in exchange for the promise; consideration, or a substitute, is necessary for an agreement to be enforceable.
§ Consideration may be in the form of a return promise or performance
§ Consideration must either be a detriment (which can include forbearance of a right) to a promisee or benefit conferred upon the promisor.
§ If requirement of consideration is met, no additional requirement.
§ Consideration is a requirement except in those cases in which we say it is not a requirement.
§ Consideration – there must be a performance or a return promise bargained for.
f. Performance: Successful completion of contractual duty; may be given to the promisor or to some other person; may consist of:
§ An act other than a return promise
§ A forbearance
§ Creation, modification, or destruction of a legal relation
1. Simple Donative Promises
v General Rule: Donative promises – promises to make gifts – are not enforceable because there is no exchange of value; it is of suspect or marginal value, i.e., no consideration.
· A complete
. Said to apply only when representations are made. Works like an evidentiary rule. A alleges the existence of facts X, Y, and Z, and those facts, if true, give rise to an action against B. A proves X and Y by direct evidence but seeks to prove Z by showing that B said that Z was true, and that A relied on Z. B is estopped from introducing evidence that Z was not true. Differs from promissory estoppel in two ways:
o Estoppel in pais is based on a statement of fact, whereas Section 90 is based on a promise
o An action can be brought under Section 90, while estoppel in pais requires some independent right.
· Reliance is a substitute for consideration.
· Equitable Estoppel – Not every time there is reliance is a contract enforceable, only when there would be injustice if it were not enforced. (must be fair)
o not limited to contract law settings, much older, more applications, has further reach, more flexible