CONSIDERATION

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CONSIDERATION
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P
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T. LEIGH ANENSON, J.D., LL.M.
Make yourself necessary to someone. Ralph
Waldo Emerson, The Conduct of Life (1860)
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CONTRACT LAW

• Introduction to Contracts
• The Agreement Offer
• The Agreement Acceptance
• Consideration
• Reality of Consent

• Capacity to Contract
• Illegality
• Writing
• Rights of Third Parties
• Performance Remedies

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Learning Objectives

• ELEMENTS
• Legal value
• Bargained-for exchange
• EXCHANGES not consideration
• EXCEPTIONS to consideration

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1 ELEMENT Legal Value

• EXAMPLES
• Payment of or property
• Refrains from doing something the person has the
  legal right to do
• Does something the person had no prior legal duty
  to do
• COURTS WILL NOT JUDGE ADEQUACY
• NOT A GIFT

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2 ELEMENT Bargained-for Exchange

• CAUSATION
• EXAMPLE Gottlieb v. Tropicana Hotel and Casino

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Exchanges NOT Consideration

• Illusory promises
• Heye v. American Golf Corporation, Inc.
• Preexisting duties
• Zhang v. 8th District Court
• Past consideration

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Preexisting Duties Special Rules

• CONTRACT MODIFICATION
• Modification due to unforeseen circumstances
• OR
• CISG and UCC 2209(1) sale of goods
• DEBTS only if good faith dispute
• COMPOSITION AGREEMENTS
• FORBEARANCE TO SUE

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EXCEPTIONS TO CONSIDERATION

• UCC FIRM OFFER
• UCC CONTRACT MODIFICATION
• PROMISSORY ESTOPPEL
• Calabro v. Calabro
• PROMISE TO PAY DEBT BARRED BY STATUTE OF
  LIMITATIONS OR BANKRUPTCY
• CHARITABLE SUBSCRIPTIONS