Basics
What is consideration?
Something of value exchanged in a contract.
What is given in a bilateral contract?
A promise for a promise.
What kind of exchange must consideration be?
Bargained-for.
What’s the main exception to needing consideration?
Promissory estoppel.
A company pays someone to deliver goods. Is there consideration?
Yes.
What does consideration show between two parties?
That both sides are giving something.
What is given in a unilateral contract?
A promise for an act.
What is “past consideration”?
Something done before the promise.
What must someone do for promissory estoppel to apply?
Rely on the promise.
A boss says “I’ll give you a bonus if I feel like it.” Valid promise?
No, it’s illusory.
True or False: Every contract needs consideration.
True.
Can services be consideration?
Yes.
Is past consideration valid?
No.
True or False: Contracts under seal may not need consideration.
True.
A worker asks for more money to finish the same job. Valid consideration?
No.
Without consideration, what is a promise called?
A gift.
What does “forbearance” mean?
Giving up a legal right.
What is an “illusory promise”?
A promise that doesn’t really commit to anything.
What happens if someone relies on a promise and it would be unfair not to keep it?
The court may enforce it.
A friend promises money after you already helped them move. Valid contract?
No, it’s past consideration.
What are the two parts of valid consideration?
Bargained-for exchange and legal value.
True or False: Consideration must always be money.
False.
What rule says doing what you already must do isn’t new consideration?
The pre-existing duty rule.
What does promissory estoppel protect against?
Injustice caused by broken promises.
A student turns down another job because a company promised to hire them. What might help them in court?
Promissory estoppel.