9-1
3 elements of consideration, as well as what all consideration must be for each side
1. Give
2. Trade
3. Legal Value
- Fair for both sides, meaning you accept what you get
This means acting based on a promise
Detriment
This type of law oversees any contract that is non business related
Common Law
Evan decides to sell his collection of 1972 Kelloggs 3D baseball cards, as he learns they are worth $1200 for the set. A buyer named John, comes to get the set. After looking at the set, John says to Evan "Ok, these are nice and clearly real, but the most I am paying for these is $600. Will you take that?" and Evan says "Listen, I can drop the price a little, but only to $1000. Take it or leave it" and John says "Ok, deal. Here is the $1000". What elements of consideration took place and is this deal fair to John?
1. Give: Each side gave a promise (Card for money)
2. Trade: They both accepted the deal and it took place
3. Legal Value: Cards were real and cash
4. Consideration WAS fair, as each side accepted the final terms of the deal
If one party is given something and the other party is not given anything, what is this called and is there consideration for either side?
Most common type of consideration traded
Promise for a promise or a benefit for a benefit
These are known as open ended promises where either party can escape a legal obligation
Illusory Promise
This type of law oversees all business contracts
UCC
in 1977, Patrick learns his sister is coming home from college and he is excited about a new idea he has to make money next year, when she goes back. Patrick tells his sister "I created a new product called Chicken Wings, that I think will take off in your college in the fall. I have an old Dodge Econoline Van, converted to a food truck with deep fryers and we can make a ton of money! The wings are being thrown out by restaurants, I can get them cheap and we can create an agreement to sell them ONLY at your college for a year, plus wait until you taste the hot sauce, they are amazing. I'll give you 20% of the profits if you help get the word out and help me sell them too!" If the 2 create this agreement, what is it called and is there consideration for each side?
1. Its a requirements contract, as chicken wings are sold everywhere, but not Patricks type
2. Yes, Patrick gets them into a college and his sister makes 20%
This means promising something to another party based on what they already get within the contract they are entering into. (For ex: Offering to get a 1 year warranty for free, even though its already part of the purchase)
Existing Private Duty
This is defined as a change in the position of the parties as a result of the contract
Legal Value
This is a one sided illusory promise where the buyer can leave the legal obligation, but the seller cannot, because they are giving the buyer a 100% guarantee
Termination Clause
If you go into a store and they offer you a rain check, legally they are known as this
Firm offer
2 Frontier Law students have a discussion one day at graduation about their career plans. One named Olivia, says to the other, named Natalie "Hey once we get out of law school, let make an agreement that the first of us to make partner in a law firm has to offer the other a partnership as well. What do you think?" Natalie says "I hope we can make this happen. At the 10 year high school reunion, Olivia learns Natalie is a partner in her law firm and says "I thought we had an contract, why am I not a partner with you?" First, did they have a contract? Explain why or why they did not have a contract.
1. No they did not
2. Illusory promise was made, nothing definite in terms and neither side took on a detriment of any kind, as they planned to go to lawschool already
Offering not to break the law or some rule in exchange for entering into a contract is called this
Existing PUBLIC Duty
This must be proven in order to claim the consideration traded was not fair
Genuine Assent is missing (Misled, lied to or something was hidden from you)
This is a type of agreement where a company buys the entire line of production from some producer, meaning they have complete control of the product.
Output Contract
This is when a party offers something of value to keep an offer open under a Common Law contract
Option
Rob owns a fashion store named "Goths are Us" and his #1 customer is a guy named Joey. Rob extends Joey credit, as he is trying to start a band and Rob thinks the band could get him future sales. Joeys band never takes off and Joey now owes Rob over $3000 for various purchases over the last 3 years. Worried, Rob offers Joey a 1 time offer and says "Pay me $800 today and I will forgive the rest of what you owe" and Joey says "Deal Rob! I knew you always looked out for me". First what was Joey offered? Next , is there consideration for each side in this agreement?
1. Accord and Satisfaction, which is an offer to pay less (Accord) and Joey paid it off (Satisfaction)
2. Yes, there is consideration for each. Joey gets out of debt and Rob decides something is better than collecting nothing
This is a token or small amount of consideration offered, such as $1.00 to buy a house.
Nominal
This is a promise not to do something I have a legal right to do
Forbearance
This is where a supplier offers to sell their product exclusively to one store or business to control where it is sold.
Requirements Contract
This is the rule where a person making a promise cannot back out because the other party expected the promise, acted based on expecting it and will face a substantial economic loss because the promise was not fulfilled
Promissory Estoppel
Trey decides the dating advice he has been given is so good, he is going to start a business as an influencer. Learning of this, Trey is offered $500,000 from a publishing company in advance , so Trey can write a book about his new Youtube channel and what this advice will cover. Trey accepts the offer, but the book never gets written, as Trey decides its not necessary, as the Youtube channel has soured to over 4 million viewers. What can the publishing company claim to assist them in forcing Trey to write the book and how would they do this?
1. Promissory estoppel or that a detriment was taken on (Trey accepted the $500,000 advance)
2. They would say the $500,000 is a substantial loss and since Trey accepted it, the contract exists. They relied on the promise of the book being written, act (Wrote the check) and now, because of the substantial loss, needs courts to force Trey to write the book. They may have other losses too, if they advertised that the book was coming out
If Gordon lives up to his promise and gets the class a pizza for the class average being an 88% or above, is this agreement considered a contract? Explain
No, its a gift. There is no consideration, as Gordon gains nothing.