Contracts – Contracts Formation: Consideration

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Contracts

Step (3): Was there consideration?

Consideration:

  • The exchange of value between the parties.
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-Amount
  • All contracts need consideration no matter how small the amount.

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-Past Consideration
  • Past consideration is no consideration. Past consideration is a promise given in exchange for something that is already done.

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-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 Promise
  • Illusory promises are not enforceable because they do not actually promise anything.

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-Promissory Estoppel
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  • 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).
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January 18th, 2017