ACTG 2P40 Lecture 3: Chapter 7
20 Jan 2019
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Chapter 7: contact formation consideration and intention. Accepted offer is not enforceable unless it has consideration. An accepted offer must for a bargain each party must pay a price for the promise. Consideration: the price for which the promise of the other is bought. E. x. some right, interest, profit or benefit accruing to the one party or some forbearance, detriment, loss or responsibility given, suffered or undertaken by another. Rules for consideration: benefit can flow from a third party, exchange must be for some value, but it does not have to be equal value, consideration must be agreed upon. A person can make a promise to another without bargaining for anything in return. A promise made without bargaining for anything or accepting anything in return is called a gratuitous promise. (i. e. a promise without consideration) Even if an offer is accepted by the offeree, the promise is not enforceable in law i. e. there is no contract.
