LAW 122 Chapter Notes - Chapter 8: Estoppel, Novation, Himalaya Clause
13 Sep 2013
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Main reason for contract law is to enforce bargains, (involves a mutual exchange. Gratuitous promise: is a promise for which nothing of legal value is given in of value) exchange. Creation of contract generally depends on an exchange of value. 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 consideration: may be almost anything of value. Judges generally wanted to avoid becoming involved in intimate matters. Although consideration must be sufficient it does not have to be adequate. Adequate consideration: has essentially the same value as the consideration for which it is exchanged. Look after own interests known as peppercorn theory. Is a promise not to pursue a lawsuit. Also consider the importance of receiving advice from a lawyer before agreeing to forebear on a possible action.
