Textbook Notes (362,796)
Canada (158,054)
LAW 122 (614)
Stan Benda (71)
Chapter 8


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Ryerson University
Law and Business
LAW 122
Stan Benda

Chapter 8 Consideration and PrivityCONSIDERATIONThe main goal of contract law is to enforce bargains And as business ppl know a bargain involves more than an offer and an acceptance it also involves a mutual exchange of valueoGratuitous Promise is a promise for which nothing of legal value is given in exchange Eg I offer to give you a laptop and you simply agree to receive it Consequently while you will be entitled to keep the laptop if I actually give it to you you cannot force me to hand it over to you in the first placeBc we did not have a bargain we did not have a contract and thus I am entitled to change my mindThe creation of a contract therefore generally depends on an exchange of value Consideration must be provided by both partiesoConsiderationexists when a party either gives or promise to give a benefit to someone else of suffers or promises to suffer a detriment of itselfConsideration must move from each side of a contract but not necessarily to the other side Eg you and I will have a contract if I promise to give 5000 to your brother and you promise to give a car to my sister In that situation it is enough that we promised to provide a benefit to someone we do not have to promise to provide benefit to each otherSufficient and Adequate ConsiderationA contract must be supported by sufficient consideration oSufficient Considerationmay be almost anything of value Eg It is sufficient if a person promises to give up smoking drinking or swearingThere are nevertheless exceptions love and affection is not enough to support an enforceable agreementAlthough a contract must be sufficient it does not have to be adequate oAdequate Considerationhas essentially the same value as the consideration for which it is exchangedEg If I promise to give you my computer worth 5000 and you promise to give up smoking drinking and swearing for a year it would seem I made a very bad bargain In economic terms I will be giving up far more than you will be providing in returnThe law presumes that ppl are able to look after their own interests and it generally allows them to decide what price they will demand under a contractForbearance to Sue For business ppl the diff bt sufficient considerationadequate consideration is particularly important in the context of forbearance to sue oForbearance to Sueis a promise to not pursue a lawsuitIn the vast majority of cases the parties settle their dispute out of court They often enter into a contract for that purposeThe plaintiff promises not to bring the matter into court and the defendant agrees to pay less money than it allegedly owedIf the plaintiffs action would have succeeded in court there obviously is consideration on both sides of the contract The plaintiff surrendered the right to claim full damages and the defendant paid money 1 of 7
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