1、ConsiderationCHAPTER 11Quote of the Day“Promises are the uniquely human way of ordering the future.”Hannah Arendt, German-American Political ScientistThe StuffConsiderationConsideration means that there must be bargaining that leads to an exchange between the parties.Consideration can be anything th

2、at someone might want to bargain for.A promisor is the person who makes the promise, and promisee, the person to whom the promise is made.Anything of ValueA Bargain and an ExchangeThe thing bargained for can be:another promise or action.a benefit to the promisor or a detriment to the promisee.a prom

3、ise to do something or a promise to refrain from doing something.“Bargaining is obligating yourself in order to induce the other side to agree.”There is consideration to support a contract between A and B, when they bargain.BargainABand their bargaining causes BOTH parties .to either give a benefit

4、to the other or to suffer a detriment themselves.Which causes.A to give B a benefitORA to suffer a detrimentANDANDANDANDB to give A a benefitORB to suffer a detrimentConsideration supports a contract!Adequacy of ConsiderationCourts seldom inquire into the adequacy of consideration.A previously paid

5、benefit is generally not consideration because it was not meant to induce the other side to agree.Exception: Economic Benefit - in some cases, courts will enforce consideration that is an economic benefit, given with the expectation of later payment.Mutuality of ObligationsIllusory PromiseIf one par

6、tys promise is conditional, the other party is not bound to the agreement.Sales Law: Requirements and Output ContractsIn a requirements contract, the buyer agrees to purchase 100% of her goods from one seller.In an output contract, the seller guarantees to sell 100% of its output to one buyer, and t

7、he buyer agrees to accept the entire quantity.Section 2-306 of the UCC expressly allows output and requirements contracts in the sale of goods.Preexisting DutyA promise to which the promisor is already obligated is not consideration. Exceptions:If the scope of the promisors task increases, that incr

8、ease is consideration.When unforeseen circumstances cause a party to make a promise regarding an unfinished project, that promise is valid consideration.If both parties agree to cancel a contract, then form another one in its place, the new contract is valid.Modification of a sale of goods is allowa

9、ble without consideration, unless there is a written agreement forbidding such modifications.Liquidated- made into a cash ammountSettlement of Debts - Liquidated DebtA liquidated debt is one in which there is no dispute about the amount owed.In cases of liquidated debt, if the creditor agrees to tak

10、e less than the full amount as full payment, her agreement is not binding.If the debtor offers a different performance to settle the debt and the creditor agrees, the agreement is binding.Settlement of Debts - Unliquidated DebtA debt is unliquidated if: (1) the parties dispute whether any money is o

11、wed, or(2) the parties agree that some money is owed but dispute how much.The parties may agree to settle for less than what is owed; this “accord and satisfaction” will be enforced if the debtor pays the agreed amount.Payment by CheckCommon Law ruling: If a debtor writes “Paid in Full” on a check,

12、and the creditor cashes it, the payment is in full whether or not it was the right amount.UCC 3-311Affirms the Common Law ruling, but adds two exceptions:Organizations may notify debtors that any offers to settle debt for less than the whole amount must be directed to a certain person.The creditor can refund the paid amount w