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Contracts
University of Mississippi School of Law
Bradley, John R.

Contracts I
Fall 2010
Professor Bradley
 
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
 
v  Terms
 
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
          i.     Promises
          ii.    Promise for a performance
                 iii.        Performances
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