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LAW 122 (614)
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Chapter 8

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Ryerson University
Law and Business
LAW 122
Stan Benda

Chapter 8Consideration and Privity ConsiderationMain goal of contract law is to enforce bargainsbargains involves more than an offeran acceptance it involves a mutual exchange of value Gratuitous promise is a promise for which nothing of legal value is given in exchange ex on pg 177Creation of contract therefore generally depends on an exchange of valueConsideration exists when a party either gives or promises to give a benefit to someone else or suffers or promises to suffer a loss to itself ex on pg 177Sufficient and adequate considerationA contract must be supported by sufficient considerationSufficient consideration may be almost anything of value o It is sufficient if a person promises to quit smoking drinking or swearing but there r some exceptions like loveaffection which is not enough to support an enforceable agreement ex on pg 178Although consideration must be sufficient it does not have to be adequateAdequate consideration has basically the same value as the consideration for which it is exchanged ex on pg 178For business ppl the difference btwn sufficient considerationadequate consideration is particularly important in the context of forbearance to sue o Forbearance to sue is a promise to not engage in a lawsuitSince lawsuits r expensiveunpredictable very few cases r actually decided by judges in fact parties settle their dispute out of courtthey often enter into a contract for that purposePlaintiff promises not to bring the matter into courtdefendant agrees to pay less money that it supposedly owed more on pg 178Case brief 81 on pg 179 usefulPast considerationMutuality of consideration requires that each party provide consideration in return for the other partys considerationRequirement of mutuality is important to the idea of past consideration o Past consideration consists of something that a party did prior to the observation of a contracto Past consideration is not given in exchange for the other partys considerationthats y past consideration is not really consideration at allit cannot support a contract ex On pg 180
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