CHAPTER 8 Consideration

1. CHAPTER 8Consideration 8-1 Types of Consideration 8-2 Questionable Consideration 8-3 When Consideration Is Not Required

2. 8-1 Types of Consideration GOALS • Identify the three requirements of consideration • Recognize the various forms of consideration Chapter 8

3. FOCUS • List five promises you have recently made. • Beside each promise list what you received in return. • Review the list and place a check by the promise(s) that you believe would be legally binding on you if the promisee pursued the issue in court. Chapter 8

4. CONSIDERATION • Act, forbearance, or promise • Trading • Legal value • Adequacy of consideration • Nominal consideration Chapter 8

5. List the three requirements of consideration. Chapter 8

6. 8-2 Questionable Consideration GOALS • Describe situations in which consideration is present only under limited circumstances • Recognize when what appears to be binding consideration is not Chapter 8

7. FOCUS Scenario • Ms. Miller tells her students: “You have worked hard, and if you continue to perform at this high level, I'll pay for a pizza party at the end of the year—if I think it is warranted.” The students continue to work hard, and class grades are high, but no party is given. Question • Can the students enforce the promise? Chapter 8

8. CIRCUMSTANTIAL CONSIDERATION • Illusory promises • Termination clauses • Output and requirements contracts Chapter 8

9. CIRCUMSTANTIAL CONSIDERATION (continued) • Existing duty • Existing public duty • Existing private duty • Settlement of liquidated debts • Settlement of unliquidated debts • Release • Composition of creditors Chapter 8

10. Why is consideration not binding in illusory contracts? Chapter 8

11. FALSE CONSIDERATION • Mutual gifts • Past performance Chapter 8

12. What distinguishes a gift from a valid contract? Chapter 8

13. 8-3 When Consideration Is Not Required GOALS • Distinguish situations in which consideration is not needed • Recognize when the doctrine of promissory estoppel can be applied Chapter 8

14. FOCUS • Why are exceptions to the doctrine of consideration needed? Chapter 8

15. EXCEPTIONS TO THE REQUIREMENT OF CONSIDERATION • Promises to charitable organizations • Promises covered by the UCC • Firm offers • Modifications • Promises barred from collection by statute • Statute of limitations • Debts discharged in bankruptcy • Promissory estoppel Chapter 8

16. Name four exceptions to the requirement of consideration. Chapter 8