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Consideration: Chapter Outcomes

10-1 Consideration is a necessary element for a valid contract. It involves the promise to exchange things of value such as goods, services, or money. 10-2 Consideration generally takes the form of money, property, services, promises not to sue, or charitable pledges. 10-3 Problems can arise when the consideration involves a disputed amount of money owed between the parties. Agreements without consideration may still be enforceable under certain conditions such as seals, bankruptcy, or statutes of limitations.

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70 views

Consideration: Chapter Outcomes

10-1 Consideration is a necessary element for a valid contract. It involves the promise to exchange things of value such as goods, services, or money. 10-2 Consideration generally takes the form of money, property, services, promises not to sue, or charitable pledges. 10-3 Problems can arise when the consideration involves a disputed amount of money owed between the parties. Agreements without consideration may still be enforceable under certain conditions such as seals, bankruptcy, or statutes of limitations.

Uploaded by

Thalia Sanders
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Chapter 10 CONSIDERATION

Chapter Outcomes:
1. Explain the term consideration and
identify the characteristics necessary for
valid consideration.
2. Describe the attitude of the court when
dealing with questions that involve the
adequacy of consideration.
Chapter 10 CONSIDERATION

Chapter Outcomes (continued):


3. Discuss the types of consideration that can
be used to bind parties to one another in a
contractual situation.

4. Outline the procedure that a debtor and


creditor may use to settle a claim by means
of accord and satisfaction.
Chapter 10 CONSIDERATION

Chapter Outcomes (continued):


5. Identify those agreements that may be
enforceable by a court of law even though
they lack consideration.

6. Relate those agreements that appear to have


consideration, but that the courts refuse to
enforce.
10-1

Requirements of Consideration
• The Nature of Consideration
• The Characteristics of
Consideration
• Bargained-For Exchange
• Something of Value
• Legality of Consideration
10-1
Topic Quiz
Answer the following true/false questions:

1. The promise to exchange


things of value in a contract is
known as consideration.
TRUE
10-1
Topic Quiz
Answer the following true/false questions:

2. Refraining from doing or


promising not to do something
is known as forbearance.
TRUE
10-1
Topic Quiz
Answer the following true/false questions:

3. Even unconscionable contracts will be


enforced by the court.

FALSE

They will NOT be enforced!


10-2

Types of Consideration

• Money as Consideration
• Property and Services as
Consideration
• Promises Not to Sue
• Charitable Pledges
10-2
Topic Quiz
Answer the following true/false questions:

1. A promise not to sue is generally


called a release.

FALSE

It is a called forbearance.
10-2
Topic Quiz
Answer the following true/false questions:

2. Charitable pledges are never enforced


by the courts due to a lack of
appropriate consideration.
FALSE

They are enforced.


10-2
Topic Quiz
Answer the following true/false questions:

3. The courts have held that barter


agreements do not contain valid
consideration.
FALSE

They do contain valid consideration.


10-3

Problems with Consideration

• Disputed Amounts
• Undisputed Amounts
Chapter 10

LawLINKS
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.
10-3
Topic Quiz
Answer the following true/false questions:

1. Accord is the implied or


expressed acceptance of less
than what has been billed to
the debtor. TRUE
10-3
Topic Quiz
Answer the following true/false questions:

2. Satisfaction is the agreed-to


settlement, as contained in the
accord.
TRUE
10-3
Topic Quiz
Answer the following true/false questions:

3. An undisputed amount is one


on which the parties have
mutually agreed.
TRUE
10-4

Agreements Without
Consideration
• Enforceable Agreements
• Promises Under Seal
• Promises After Discharge in
Bankruptcy
• Debts Barred by Statutes of
Limitations
• Promises Enforced by Promissory
Estoppel
10-4

Agreements Without
Consideration (continued)

• Unenforceable Agreements
• Illusory Promises
• Future Gift and Legacies
• Past consideration
• Preexisting Duties
Chapter 10

LawLINKS
Lawyers Weekly Publications maintains one
of the only websites containing on-line
content of news stories at
http://www.1weekly.com/mainmenu.htm
10-1
A Question of Ethics
In Example 10-7, legally Karlsberg does
not have to pay Vargas a single penny,
despite her promise to do so. However,
is she ethically bound to keep her
pledge and deliver to Vargas the $50 that
she promised to send him? Explain.
10-4
Topic Quiz
Answer the following true/false questions:

1. The Uniform Commercial Code


requires a seal in all sale of goods
contracts.
FALSE

The need for the seal was eliminated.


10-4
Topic Quiz
Answer the following true/false questions:

2. Persons discharged from indebtedness


through bankruptcy may not even
voluntarily resume their obligations.
FALSE

They may resume their obligations.


10-4
Topic Quiz
Answer the following true/false questions:

3. Preexisting duties cannot be


made consideration in new
contract.
TRUE
SUMMARY
10-1 The fifth element necessary to any valid
contract is consideration.

10-2 In general, consideration takes the form of


money, property, or services.

10-3 Problems sometimes arise when the


consideration involved in a contract is money
and the parties do not agree on the amount of
money owed.
SUMMARY
(continued)

10-4 As a general rule, contracts are not


enforceable without consideration.
Chapter 10
Key Terms
accord 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
Chapter 10

Investigating on the Internet


Sources of information about contract law
can be accessed at:
http://www.law.indiana.edu/law/v-lib/contra
cts.html
As a research assignment, access this
website and report those sources of
information that might concern
consideration.
End of Presentation

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