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Chapter 12 BAFN
| Question | Answer |
|---|---|
| Define consideration | there must be bargaining that leads to an exchange between the parties; can be anything that someone might want to bargain for |
| What can be bargained for? (3) | another promise or action; a benefit to the promisor or a detriment to the promisee; a promise to do something or a promise to refrain from doing something. |
| Consideration for a promise should be at least one of these two things... | Legally detrimental to the promisee, or Legally beneficial to the promisor. |
| Adequacy for consideration (3) | 1) A Court will not question the fairness of the bargain if legally sufficient 2) Law does not protect a person from entering into an unwise contract 3) In extreme cases a court may find a party lacks legal capacity or that contract was unconscionable |
| Exception to Adequacy for consideration | Economic Benefit -- in some cases, courts will enforce consideration that is an economic benefit, given with the expectation of later payment. |
| Define Illusory Promise | If one party’s promise is conditional, the other party is not bound to the agreement. |
| Section 2-306 of the UCC does what? | expressly allows output and requirements contracts in the sale of goods |
| Exception for Preexisting duties (2): | Additional work. When a promisor agrees to do something above and beyond what he is obligated to do ; Modification. If both parties agree to a modification, the best solution is to rescind the contract and draft a new one. |
| What is Past consideration? | Past consideration is an act or benefit given in the past that was not given in exchange for the promise in question, thus it cannot be consideration |
| Define Liquidated Debt | is one in which there is no dispute about the amount owed. |
| Common Law ruling: If a debtor writes “Full Settlement” on a check, and the creditor cashes it.... | the payment is in full whether or not it was the right amount |
| Exceptions to the common law ruling (2) : | 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 within 90 days and then demand the full amount |
| True or False: Consideration is legal value bargained for and given in exchange for an act or a promise | True |
| True or False: A person who agrees not to file suit has not provided valid consideration | False – refraining from something a person is not legally obligated to do is valid consideration. |
| The contract or memorandum must be signed by the defendant, and It must state with reasonable certainty: (3) | 1) the name of each party 2) the subject matter of the agreement, and 3) all of the essential terms and promises. |
| True or False: A contract for interest in land must be in writing to be enforceable | True |
| Exception for Agreement for Interest in Land | Promissory Estoppel: If a promisor makes an oral promise that should reasonably cause the promisee to rely on it, and the promisee does rely, the promisee may be able to enforce the promise |
| Define Collateral Promise | When one person agrees to pay the debt of another as a favor to that debtor |
| True or False: A contract that cannot, by its own terms, be performed within one year from the date it was formed must be in writing to be enforceable | True |
| True or False: An executor’s promise to use her own funds to pay a debt of the deceased must be in writing to be enforceable | True |
Created by:
ryan3743
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