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BU231 (315)
Chapter 6

BU231 Textbook Notes Chapter 6.docx

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Wilfrid Laurier University
Shelley Mc Gill

Chapter 6 The meaning of consideration  An accepted offer will not be recognized as an enforceable contract unless it has consideration o The accepted offer must form a bargain  Each party pays a price or gives value for the promise of the other  Makes contracts legally binding  = the price for which the promise of the other is bought  Does not have to be for their own benefit or of the same value as what they give  as long as it is for the other party to do something that they would otherwise not do, the promisor has received consideration Gratuitous promises  = a promise made without bargaining for or accepting anything in return  Not enforceable in law  But cannot demand for the gifts back unless under undue influence Adequacy of consideration  Consideration does not have to be of equal value  Can be a dollar/ broken pencil for something much more valuable  it is a dollar/ broken pencil they would not have had before the contract  Court will only examine the adequacy of consideration if there is some allegation of wrongdoing by a party o Ie. if evidence points to fraud, duress or undue influence exerted on the promisor Motive contrasted with consideration: past consideration  Consideration is the price that makes the promisor’s promise binding  Motive is irrelevant  Past consideration = a gratuitous benefit previously conferred upon a promisor o If one person promises to reward another who has previously done a gratuitous promise  Not legally binding Relation between existing legal duty and consideration  Consideration already given will NOT support new promises when parties try to modify an existing contract  Sometimes, consideration may interfere with public policy o If the consideration are similar or the same to their regular duties = unenforceable Gratuitous reduction of debt  If the creditor chooses to reduce the debt in order to receive some payment or payment in advance, they may bind themselves to do so  Applies only to payments of money and must be agreements between creditors and debtors  Restricted by st
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