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Chapter 8

Management and Organizational Studies 2275A/B Chapter Notes - Chapter 8: Estoppel, Promissory Note, Negotiable Instrument


Department
Management and Organizational Studies
Course Code
MOS 2275A/B
Professor
James Hildebrand
Chapter
8

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Consideration: Something that has value in the eyes of the law and which a promisor receives in return
for a promise
May be a payment of money, a service, right or delivery of property
Consideration for a promise must exist for the contract to be legally binding
Exceptions:
An offer of service if accepted must be performed with skill and care, otherwise the promisor
will be liable for any losses
A person may be liable on a promissory note or negotiable instrument even though there is no
consideration between them
If a charity takes on a project due to the strength of a donor's pledge then the promise may be
enforced
Only if the donation was a substantial amount needed for the project
Seal: A formal mode of expressing the intention to be bound by a written promise or agreement. This
usually takes the form of signing or affixing a wax or gummed paper wager beside the signature or making
an engraved impression on the document itself
To prove authenticity of an agreement
Tenders: the advertisement of the particular needs of a firm to potential suppliers of the goods or
services, this is called calling for tenders and has no binding effects on the firm that makes the call
Used by companies wishing to establish a contractual relationship
Quantum Meruit: "As much as he has earned" A quasi-contractual remedy that permits a person to
recover a reasonable price for services or materials requested, where no price is established when the
request is made
If the parties agree on a price at anytime than this price will prevail
The Debtor-Creditor Relationship:
The creditor has no rights under contract once the creditor has received full payment
A lesser sum can be accepted by a creditor as payment in full
Not permitted to claim a balance once the lesser sum has been paid
Estoppel: A rule whereby a person may not deny the truth of a statement of fact made by him or her
when another person has relied and acted upon that statement. The promise must have directly
influenced a person's actions or behaviour
Chapter 8: Requirement of Consideration
Monday, February 1, 2016 12:39 PM
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