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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
Answer the following true/false questions:
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1010--11
3. Even unconscionable contracts will be
enforced by the court.
Topic Quiz
FALSE
Answer the following true/false questions:
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
Answer the following true/false questions:
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
Answer the following true/false questions:
They are enforced.
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1010--22
3. The courts have held that barter
agreements do not contain validconsideration.
Topic Quiz
FALSE
Answer the following true/false questions:
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
Answer the following true/false questions:
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1010--33
2. Satisfaction is the agreed-to
settlement, as contained in the
accord.
Topic Quiz
TRUE
Answer the following true/false questions:
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1010--33
3. An undisputed amount is one
on which the parties have
mutually agreed.
Topic Quiz
TRUE
Answer the following true/false questions:
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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
Chapter 10Chapter 10
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
Answer the following true/false questions:
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
Answer the following true/false questions:
They may resume their obligations.
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1010--44
3. Preexisting duties cannot be
made consideration in new
contract.
Topic Quiz
TRUE
Answer the following true/false questions:
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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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Chapter 10Chapter 10
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
Chapter 10Chapter 10
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