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Chapter 12

LPP 255 Chapter Notes - Chapter 12: Estoppel


Department
Law & Public Policy
Course Code
LPP 255
Professor
Unkown
Chapter
12

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CHAPTER 12
Consideration is broken down into 2 parts
In bilateral contracts, consideration consists of a promise in return for a promise
oSomething of legally sufficient value must be given in exchange for the promise
oThere must be a bargained for exchange
LEGAL VALUE
o1. A promise to do something that one has no prior legal duty to do
o2. The performance of an action that one is otherwise not obligated to undertake
o3. The refraining from an action that one has a legal right to undertake
Called forbearance
Example of bilateral: buyer and seller
oBuyer has a promise to ship goods
oSeller has a promise to pay for goods
Both promises constitutes consideration for the contract
Example of unilateral: promise in return for performance
oWhen you finish painting I will pay you
The act of painting is consideration that creates the owners contractual obligation to pay
BARGAINED FOR EXCHANGE
oThe item of value must be given or promised by the promisor in return for the promisee’s promise,
performance or promise of performance
oDistinguishes promises from gifts
No bargained for exchange in gifts
Adequacy of consideration
Consideration involves the requirement that consideration be something of legally sufficient value in the eyes of the
law
oConcerns the fairness of the bargain
Courts typically do not determine adequacy
oParties have to decide worth of promises
Inadequate consideration may cause a court to examine weather voluntary consent was lacking
Agreements that lack consideration
Preexisting duty
oA promise to do what one already has a legal duty to do, does not constitute legally sufficient consideration
May be imposed by law or a previous contract
Unforeseen difficulties
oCourts sometimes allow exceptions to preexisting duty
Rescission and new contract
oRescission- unmaking of contract
Past consideration
oYou cannot bargain for something that has already taken place
oPast consideration= no consideration
oNoncompete agreement, covenant not to compete
Employee agrees not to work for competitors
Illusory promises
oThe terms of the contract express uncertainty
Illusory= without consideration and unenforceable
Fails to bind the promisor
Option to cancel clause
oWhen the promisor has the option to cancel the contract before performance has begun, the promise is
illusory
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