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LAW 122 (825)


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Law and Business
LAW 122
Nick Iannazzo

Chapter 8 CONSIDERATION AND PRIVITY CONSIDERATION  Main reason for contract law is to enforce bargains  Mutual exchange for value  Gratuitous promise: is a promise for which nothing of legal value is given in exchange Creation of contract generally depends on an exchange of value. Consideration must be provided by both parties Consideration: exists when a party either gives (or promises to give) a benefit to someone else or suffers (or promises to suffer) a determinant to itself. Sufficient and Adequate consideration  Sufficient consideration: may be almost anything of value  Judges generally wanted to avoid becoming involved in intimate matters  Adequate consideration: has essentially the same value as the consideration for which it is exchanged Forbearance to Sue  Is a promise not to pursue a lawsuit Past consideration  Mutuality of consideration: requires that each party provide consideration in return for the other parties consideration  Past consideration: consists of something that a party did before entering into a contract Pre-Existing Obligation  An obligation that existed, but was not actually performed, before the contract was contemplated o A pre-existing public duty o A pre existing contractual obligation owed to a third party o A pre existing contractual obligation owed to the same party Pre-Existing Public Duty  Person who owes a pre-existing public duty cannot rely upon the obligation as consideration for a new contract  Ex. Firefighters and police officers  By becoming a public servant a person does not promise to protect citizens around the clock Pre-existing contractual obligation owed to third party  A promise to perform a pre existing obligation that previously arose under a contract with a third party can be good consideration for a new contract  Ex quartet getting paid for two separate contracts by doing one task, but if she fails to do the task she can be held liable twice Pre-Existing contractual obligation owed to the same party  If obligation arose under an earlier contract with the same party that is on the other side of the new contract  People can use novation to discharge their initial contract and enter into a new agreement that includes a higher price Promise to Forive an existing Debt  Suppose lend 100,000 to me which I promise to pay in cash in june 1.  Explain that I do not have enough money and that you will discharge my debt in exchange for 70,000. later on he can ask for 30,000 because the 70,000 is part performance of promise I had earlier Several exceptions 1. a promise to accept a smaller sum is enforceable if I is placed under seal 2. a promise to accept less money is enforceable if the debtor gives something new in exchange for it. Ex 70 K plus a car Certain restrictions: 1. requires part performance m part of th
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