ACCT 324 Lecture 9: 9/7 Chapter 15
Document Summary
Consideration- something of value, given in exchange for something else of value, that is the product of a mutually bargained for exchange. For a promise to be enforced legally, there must be consideration. One party makes promise knowing the other party will rely on it. Other party relies on promise ( actual reliance ) Justice dictates enforcement of promise, even though it is not supported by consideration. Reliance damages given if you"re offered a job and not have it for you, etc. Past consideration does not constitute consideration for purposes of present contract. Promise to do something you are already legally obligated to do is not valid consideration ( pre-existing duty rule ) Liquidated debt- no dispute as to amount of money owed. Unliquidated debt- parties either (in good faith) dispute fact money owed, or dispute amount of money owed.