Buslaw10 Consideration

8/9/2019 Buslaw10 Consideration

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1. Explain the term consideration andidentify the characteristics necessary forvalid consideration.

2. Describe the attitude of the court whendealing with questions that involve theadequacy of consideration.

CONSIDERATION

Chapter Outcomes:

Chapter 10


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3. Discuss the types of consideration that canbe used to bind parties to one another in acontractual situation.

4. Outline the procedure that a debtor andcreditor may use to settle a claim by meansof accord and satisfaction.

CONSIDERATIONChapter 10

Chapter Outcomes (continued):


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5. Identify those agreements that may beenforceable by a court of law even thoughthey lack consideration.

6. Relate those agreements that appear to haveconsideration, but that the courts refuse toenforce.

CONSIDERATIONChapter 10

Chapter Outcomes (continued):


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Requirements of Consideration

The Nature of Consideration

The Characteristics ofConsideration

Bargained-For Exchange

Something of Value

Legality of Consideration

1010--11


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1010--11

1. The promise to exchange

things of value in a contract is

known as consideration.

Topic Quiz

TRUE

Answer the following true/false questions:


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1010--11

2. Refraining from doing or

promising not to do something

is known as forbearance.

Topic Quiz

TRUE



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1010--11

3. Even unconscionable contracts will be

enforced by the court.

Topic Quiz

FALSE


They will NOT be enforced!


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Types of Consideration

Money as ConsiderationProperty and Services as

Consideration

Promises Not to Sue

Charitable Pledges

1010--22


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1010--22

1. A promise not to sue is generallycalled a release.

Topic Quiz


FALSE

It is a called forbearance.


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1010--22

2. Charitable pledges are never enforced

by the courts due to a lack ofappropriate consideration.

Topic Quiz

FALSE


They are enforced.


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1010--22

3. The courts have held that barter

agreements do not contain validconsideration.

Topic Quiz

FALSE


They do contain valid consideration.


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Problems with Consideration

Disputed AmountsUndisputed Amounts

1010--33


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LawLINKS

Chapter 10Chapter 10

Sources of information about the laws

regulating the passing of bad checks can be

accessed at

http://www.nationalcredit.com/badcheck.html

The site is named Bad Check Laws.


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1010--33

1. Accord is the implied or

expressed acceptance of less

than what has been billed tothe debtor.

Topic Quiz

TRUE



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1010--33

2. Satisfaction is the agreed-to

settlement, as contained in the

accord.

Topic Quiz

TRUE



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1010--33

3. An undisputed amount is one

on which the parties have

mutually agreed.

Topic Quiz

TRUE



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Agreements WithoutConsideration

Enforceable Agreements

Promises Under Seal

Promises After Discharge inBankruptcy

Debts Barred by Statutes ofLimitations

Promises Enforced by PromissoryEstoppel

1010--44


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Agreements WithoutConsideration (continued)

Unenforceable Agreements

Illusory Promises

Future Gift and LegaciesPast consideration

Preexisting Duties

1010--44


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LawLINKS


Lawyers Weekly Publications maintains one

of the only websites containing on-linecontent of news stories at

http://www.1weekly.com/mainmenu.htm


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A Question of Ethics

In Example 10-7, legally Karlsberg doesnot have to pay Vargas a single penny,despite her promise to do so. However,is she ethically bound to keep herpledge and deliver to Vargas the $50 that

she promised to send him? Explain.

1010--11


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1010--44

1. The Uniform Commercial Code

requires a seal in all sale of goodscontracts.

Topic Quiz

FALSE


The need for the seal was eliminated.


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1010--44

2. Persons discharged from indebtedness

through bankruptcy may not evenvoluntarily resume their obligations.

Topic Quiz

FALSE


They may resume their obligations.


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1010--44

3. Preexisting duties cannot be

made consideration in new

contract.

Topic Quiz

TRUE



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1010--11 The fifth element necessary to any valid

contract is consideration.

In general, consideration takes the form of

money, property, or services.

1010--22

SUMMARY

1010--33P

roblems sometimes arise when theconsideration involved in a contract is money

and the parties do not agree on the amount of

money owed.


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1010--44 As a general rule, contracts are not

enforceable without consideration.

SUMMARY(continued)


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Key Termsaccord option

accord and satisfaction preexisting duty

past consideration promissory estoppel

bargained-for exchange release

consideration satisfaction

detriment statutes of limitations

disputed amount forbearance

illusory promise unconscionable

locus sigilli undisputed amount

requirements contract


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Investigating on the Internet


Sources of information about contract law

can be accessed at:

http://www.law.indiana.edu/law/v-

lib/contracts.html

As a research assignment, access thiswebsite and report those sources of

information that might concern

consideration.


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Endof Presentation

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Buslaw10 Consideration