I. Grounds for Enforcement
A. Review of Consideration
1. General Doctrine – only promises supported by consideration enforceable
2. What is consideration?
a. Restatements – promise or performance that is “bargained for”
b. Older definitions in cases
(i) Benefit to promissor / detriment to promissee
(ii) Hamer v. Sidway – (nephew to refrain from vices in order to receive money)
(iii) Seems that uncle was “bargaining for” the nephew’s actions, but doesn’t really fit nicely into the benefit/detriment argument
(iv) Hamer v. Sidway helped to persuade restatements towards “bargained for” rather than benefit/detriment idea
3. Ways Consideration can Fail
a. “bargained for” = sought in exchange + given in exchange
(i) perhaps action was NOT sought by promisor – I promise you 10,000 and you go on a trip to Europe. If I back out – even though you are detrimented by your trip, I did not seek your trip…no consideration (though perhaps promissory estoppel)
b. Not Conditional – promise not conditioned on the reciprocal action
(i) Case of grandfather who offers money so granddaughter doesn’t have to work, but doesn’t make the offer conditional on her not working
c. Not given in exchange (unknown reward cases)
(i) I offer a reward to do something, you do it, but you didn’t know about the reward….should you get the reward? (you didn’t bargain for it…)
d. Illusory promise / discretion
(i) You give me money – I say that I will deliver you a boat “if I feel like it” – is this binding?
(ii) Would be binding if I gave alternatives – I will give you a boat OR I will refrain from giving a boat to anyone else.
(iii) Court sometimes implies terms to “rescue” illusory promises
(iv) Good Faith
4. Adequacy and Sufficiency
a. Consideration must be “sufficient” but need not be “adequate”
(i) Sufficiency goes to whether it IS a bargain (nominal payment – did
nsideration might frequently be incautious/irrational
(a) Could have an institution for formal promises w/out consideration (bring back the seal, sign in blood, notarize it, etc)
7. “Past Consideration”
a. oxymoronic in a sense – can’t be true. You give me a boat just as a gift, and afterwards, I promise to give you 1,000 (so grateful) – not binding – b/c in making my promise, I’m not seeking anything – I already have it.
(i) Can’t seek to induce something that’s already happened
b. HOWEVER – courts will sometimes enforce promises WITHOUT consideration under “promissory restitution” – promise made in recognition of unjust enrichment.
(i) Case in which boulder was about to fall on someone – someone else steps in and saves the day – the would-be-victim promises to pay medical expenses, but doesn’t
