Consideration - ANS something of value exchanged for something else of value (a promise to do something/refrain from doing something to benefit another party)
- inducement to enter into a contract
- legal sufficiency bargained for in exchange -- benefits to promisor of detriment
- does...
Consideration - ANS something of value exchanged for something else of value (a promise
to do something/refrain from doing something to benefit another party)
- inducement to enter into a contract
- legal sufficiency bargained for in exchange -- benefits to promisor of detriment
- does not need economic value
- return must be BARGAINED FOR (agree)
Bilateral Contract - ANS A promise made in exchange for another promise
Unilateral Contract - ANS promise in exchange for an act
Requirements to have valid consideration - ANS 1. Must be bargained for (agree to form)
2. Must have legal sufficiency (legal detriment to promisor and legal benefit to promisee)
3. Must be adequate (but not required to be fair)
Promisee - ANS A person to whom a promise is made.
Promisor - ANS A person who makes a promise.
Illusory Promises - ANS imposes no contractual obligation on promisor (one that the maker
can keep without subjecting himself to any detriment or restriction)
- output, requirement, dealing, conditional are NOT illusory
Obligation to use "best efforts" in performing the obligation. Tested against reasonable standard
- They are not illusory -- legal consideration
Option to Cancel/Best Effort Provisions - ANS these options provide legal consideration
and therefore are not illusory contracts
Modification of an existing contract - ANS 1. a pre-existing contractual obligation is not
consideration (and not an enforcement of a new promise) - neither benefit
2. Common law- requires add'l consideration
3. UCC- no additional consideration required, but must be in good faith and no coersion
Settlement of Debts - ANS Accord and Satisfaction- agreement to settle a dispute
1. legitimate dispute
,2. one offers other a compromise to settle dispute
3. 2nd party accepts knowing it was to satisfy the dispute
if debt is not disputed, they can sue
- legitimate and non - frivolous
Contract Elements - ANS 1. Offer/Acceptance
2. Consideration
3. Capacity
4. Legal purpose
Settlement of a Disputed Debt - ANS 1. dispute as to what is owed is genuine
(non-frivolous)
2. the debtor in good faith offers a partial payment (as "payment in full")
3. the partial payment accepted by the creditor
Debt Settlement Exceptions - ANS -large creditors can accept partial amount and still
collect rest -- can send check back and pursue full amount
-within 90 days of receipt of "full payment" creditor can offer repayment of same amount and
overturn accord and satisfaction
Promissory Estoppel - ANS an equitable doctrine that prevents the promisor from revoking
the promise when the promisee justifiably acts in reliance upon the promise to his detriment
- do not need consideration
- may be able to recover to avoid injustice
- can orally modify/enforce
1. Promise
2. Reliance by promisee
3. Substantial economic detriment to promisee results
4. Enforcement necessary to avoid injustice (no relief)
RED OWL CASE
Exculpatory Clause - ANS A clause that releases a contractual party from liability in the
event of monetary or physical injury, no matter who is at fault.
- gym waiver
- cannot liable
NOT ILLEGAL
- WISCONSIN: hold open for potential enforceability (some are too broad but wisco holds a high
bar and usually do not enforce or negotiate)
Factors to consider in enforcing an exculpatory clause - ANS 1. was clause conspicuous?
, 2. was there an opportunity to negotiate
3. type of misconduct involved in the event
4. context? (consumer setting- less likely to be enforced than in a commercial setting)
5. did the clause make specific reference to relieving the party for acts of negligence?
6. was the clause part of an agreement discussing other issues?
7. does clause give adequate notice of significance?
Non-compete Clause - ANS intended to prohibit a person form being employed doing
certain things or from investing in certain activities (sale of business, employment contracts)
Factors in determining non-compete clause enforceability - ANS 1. must have a good
purpose
2. the provision cannot be overly broad
3. the geographical scope of provision must be reasonable
4. the duration of the provision must be reasonable (9-18 months for employment)
Statutes of Frauds - ANS a statute that requires certain types of contracts to be in writing
- modifications, renunciation, firm offers
types of contracts that must be in writing - ANS 1) Contracts that cannot be performed
within one year
2) Contracts for sale of goods over $500 (UCC) (mixed contracts and btw merchants)
-- if not 500, then specifically manufactured and not for general sale to others
-- party against whom enforcement is sought admits in court
3) Contracts for transfer of an interest in real property (land)
4) Promise to perform the obligations of others or pay debt
-guarantee contracts/surety (COLLATERAL)
5) Promise made in contemplation of marriage
Statue of Frauds: Writing must include - ANS 1. id of parties
2. id of subject matter/consideration
3. signed by defendant party (both if real estate)
4. other "essential" terms/conditions
Parol Evidence Rule - ANS A substantive rule of contracts under which a court will not
receive into evidence the parties' prior negotiations, prior agreements, or contemporaneous oral
agreements if that evidence contradicts or varies the terms of the parties' written contract.
- WRITTEN and need integration!!!! (complete expression of parties arguments)
- supplemental evidence: dealing, trading, performance
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