Contracts – Contracts Formation: Consideration
Step (3): Was there consideration?
- The exchange of value between the parties.
- All contracts need consideration no matter how small the amount.
- Past consideration is no consideration. Past consideration is a promise given in exchange for something that is already done.
-Consideration and K Modification
- Under the common law, new consideration is needed when a K is modified.
- Under UCC Art. 2 a K can be modified without new consideration but the modification must be done in good faith.
- Illusory promises are not enforceable because they do not actually promise anything.
- If someone detrimentally relies on a promise, that promise may be enforceable even without consideration.
- Generally, promissory estoppel should only be used as a defense (shield) and not as an offensive tactic by the plaintiff (sword).