Chapter 10: Consideration

Gift- is not considered a valid contract because it lacks appropiate “Consideration”.

Consideration: The thing of value in a contract. The mutual exchange of benefits and detriments.

***A valid contract must have each party receive a benefit and suffer a determent***

I. Contracts without consideration:

1. Promise to make a gift.
2. Promise to obey law.
3. Pre-existing duty- (job) not valid.
4. Post Consideration- not enforceable because the agreement was not agreed upon at the time of the contract.
5. Social engagements do not have valid consideration to be considered a legal agreement.

II. Adequacy of Consideration: Whether the consideration was fair or not.

• The courts will not hear cases where consideration is in dispute.
  • Exception: Unconscionable-mostly one sided and might be considered fraudulent.

III. Illusory Promise: Something that appears to be binding that may never happen.

IV. Promissory Estoppel: Under the doctrine of Promissory Estoppel, a promise made maybe enforceable consideration if the party relied upon that promise.