Transcript MUTUAL CONSIDERATION

Pages 140-153
BY: ALEXIS ESPADA
Mutual Consideration
-Consideration is an essential
element for the formation of a
contract. It may consist of a
promise to perform a desired act or
a promise to refrain from doing an
act that one is legally entitled to do.
Elements of Consideration
-Promisor: A person promising an action or forbearance
is the Promisor.
-Promisee: The person to whom the promise is made is
the promisee.
-Consideration: What one gives and receives in a
contract.
-Forbearance: Restraint or Tolerance/ Refraining from
doing what one has a right to do.
Three Requirements of
consideration
Act, Forbearance, or Promise
Trading
Legal Value
Legally sufficient consideration
may take the form of:
 Promising to do something that the
promisee has no prior legal duty to do.
 Performing an action that the Promisee is
not otherwise obligated to undertake.
 Refraining from exercising a legal right
that the promisee is otherwise entitled to
exercise.
Unilateral Contract
In a unilateral contract, an
agreement to pay in exchange
for performance, if the potential
performer chooses to act.
Bilateral Contract
An agreement formed by an
exchange of a promise in which the
promise of one party is
consideration supporting the
promise of the other party.
Consideration Exceptions
 Past consideration
 Rewards
 Promissory Estoppel
 State Statuates
 Charitable Organization
 Adequacy of Consideration
 Preexisting Duty
Purpose of Consideration
Gift- The transfer of ownership
without receiving anything in
return.
Donor- The person giving the gift
Donee- The person receiving the
gift.
Legal Concepts
 Consideration can be given by conferring (promising
to confer). A benefit or by (promising to incur) a
detriment.
 Legal value can also arise from the exchange of two
detriments.
 Economic value Is unimportant as long as there is
genuine agreement.
 A big different in economic value of what one gives
and receives may be evidence of mutual mistake,
duress, undue influence, or fraud.
Questions of Legal Concepts
 1. A promise of a gift is enforceable in court?
(True or False?)
2. A valid gift arises when there has been a transfer of
possession with the intent to transfer ownership.
(True or False?)
3. A person who makes a gift is Donee.
(True or False?)
Questions of Legal Concepts
 4. Consideration can be found in the exchange of
benefits or in the trading of benefit for a detriment, or
in the bargaining to exchange two detriment.
(True or False?)
5. To create an enforceable contract, the things
exchange must have approximately the same economic
value.
(True or False?)
 A four-piece high school rock band
Thinking Critically
about evidence
practices for at least one hour most days of
the week. Its studio is the garage of the
drummer’s home. The music was so loud
that it violated a noise ordinance. Several
neighbors offered to pay the rent at a local
mini-warehouse as a practice room for a
year if the group agreed to stop practicing
at the drummer’s home. The players
agreed. Did the neighbors receive
consideration? Did the rock band receive
consideration? Did the rock band receive a
benefit, endure a detriment, both or
neither? Was the contract enforceable?
Would it make a difference if the band’s
music didn’t violate the noise ordinance?