Bài giảng Business Law (13th edition) - Chapter 12: Consideration

ContractsIntroduction to ContractsThe Agreement: OfferThe Agreement: AcceptanceConsiderationReality of Consent3McGraw-Hill/Irwin Business Law, 13/e© 2007 The McGraw-Hill Companies, Inc. All rights reserved.ContractsCapacity to ContractIllegalityWritingRights of Third PartiesPerformance & Remedies3McGraw-Hill/Irwin Business Law, 13/e© 2007 The McGraw-Hill Companies, Inc. All rights reserved.ConsiderationPAETRHC12“Make yourself necessary to someone.” Ralph Waldo Emerson, The Conduct of Life (1860)Learning ObjectivesElements of considerationLegal valueBargained-for exchangeExchanges that fail to meet considerationExceptions to consideration requirement12 - *Consideration is legal value bargained for and given in exchange for an act or a promiseConsideration in the form of an act or promise may have legal value if the personRefrains from doing something the person has the legal right to doDoes something the person had no prior legal duty to doElements of Consideration 12 - *A promisee’s act or promise must have been bargained for and given in exchange for the promisor’s promiseExample: Gottlieb v. Tropicana Hotel and Casino in which participating in a promotion that benefited the company was adequate consideration to form a contractBargained-for Exchange 12 - *If promisee’s promise really does not bind promisee to do or refrain from doing a thing, promise is illusory and cannot serve as considerationSee Heye v. American Golf Corporation, Inc. Illusory Promises12 - *Generally, performing or agreeing to perform a preexisting duty is not considerationPromisor effectively made gratuitous promiseIncludes public duties (obey the law) and preexisting contractual dutiesPast 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 considerationNo Consideration12 - *Test Your KnowledgeTrue=A, False = BConsideration is legal value bargained for and given in exchange for an act or a promiseA person who agrees not to file suit has not provided valid considerationCourts always examine the adequacy of consideration12 - *Test Your KnowledgeMultiple ChoiceA person who agrees to obey the law has provided __________ consideration. (a) No consideration (a preexisting duty)(b) Adequate consideration that is binding and enforceableTo be valid under the UCC, an agreement to modify a contract for the sale of goods:(a) Does not need new consideration (b) Requires new consideration12 - *Thought QuestionYour Aunt agrees to buy you a new car when you graduate if you earn straight “A” grades during your senior year. You earn those grades. Have you provided legally sufficient consideration? 12 - *