Question 1

Consideration

Accepted Answer

money or something of value to keep  a promise open. "Some right, interest, benefit, or profit accruing to the party or some forbearance, detriment, loss, or responsibility give, suffered or undertaken by a party.

Question 2

"Bargained for Exchange Theory"

Accepted Answer

the promisor and the promisee must be reciprocally motivated (induced) by what the other party if giving. Seeking/induced. More modern test applied to cases rather than benefit detriment theory.

Question 3

Forbearance

Accepted Answer

Act of delaying or refraining from something. Either a right, payment, or action.

Question 4

Detriment

Accepted Answer

Injury or loss of something.

Question 5

Hamer vs. Sidway

Accepted Answer

Uncle promised to pay nephew $5,000 on his bday if he refrained from drinking smoking, cursing, etc. Court enforced the consideration here as uncle was seeking nephews good behavior in exchange nephew was seeking the $5,000. Nephew did refrain from above.

Question 6

Appeal of Clark

Accepted Answer

Mr. and Mrs. Clark taking care of sick Sheldon. He left them a promissory note for $700, passed away and did not leave it in his will. Court still enforced the note bc Clark's undertook taking care of Sheldon and he promised to leave them the note.

Question 7

Promissory Note

Accepted Answer

A written promise to pay a stated sum of money usually specifying a date or payment.

Question 8

United States vs. Meadors

Accepted Answer

Bank was induced for the loan to be paid back through interest, Meadors was not induced by  anything, loan amount was already preapproved; there is consideration between the underlying ppl who were signing the loan but not for Meadors. No knowledge.

Question 9

Meincke vs. Northwest Bank & Trust Co.

Accepted Answer

Reciprocal inducement is required for consideration to be valid. Must induce both parties for valid consideration of a promise.

Question 10

Schnell vs. Nell

Accepted Answer

A promise to make a gift for nominal consideration or out of moral obligation is unenforceable for lack of consideration. Love & affection, one penny, worthless claim against her estate.

Question 11

Restatement §71

Accepted Answer

Consideration. "bargained for" exchange explained (b). In order for there to be consideration the promise or performance must be bargained for. Reciprocal exchange of something of value.

Question 12

Restatement §81

Accepted Answer

Consideration as Motivate or Inducing Cause

Question 13

Restatement §90

Accepted Answer

Adequacy of Consideration; Mutuality of Obligation. The principle of this Section is flexible. The promisor is affected only by reliance which he does or should foresee, and enforcement must be necessary to avoid injustice.

Question 14

Restatement §79

Accepted Answer

Benefit Detriment Theory. Older theory.

Question 15

Conditional Gifts

Accepted Answer

Generally NOT enforceable as they tend to lack consideration.

Question 16

Tramp Hypothetical

Accepted Answer

used to illustrate a conditional gift. No reasonable person would conclude the short walk to be consideration for the promise, but that in the event of the tramp going to the shop the promisor would make him a gift (gratuitous).

Question 17

Gratuitous

Accepted Answer

Free of charge/expect nothing in return. Gift.

Question 18

if condition no benefit to the promisor and merely for the purpose of enabling the promisee to receive a gift,  event on which the promise is conditional, though brought abt by the promisee in reliance on the promise, not  interpreted as consideration.

Accepted Answer

True. Think Tramp Hypothetical

Question 19

Is the happening of the condition will be a benefit to the promisor? If yes, it is a fair inference that the happening was requested as a consideration.

Accepted Answer

True. Think opposite of Tramp Hypothetical.

Question 20

A gratuitous promise is generally unenforceable bc of lack of consideration.

Accepted Answer

Yes; these type of promises generally lack consideration and are not enforceable as a result.

Question 21

Illusory Promises

Accepted Answer

R§77.  Not consideration. If  a restriction either expressed or implied on the promisors ability to perform, the promise is not illusory. Termination clauses. Good faith can get rid of what might seem an illusory promise and count as valid. (Questar)

Question 22

Settlement Agreements/ Worthless/ Invalid Claims

Accepted Answer

For a settlement agreement to be binding each party must be supported by consideration. Promised pay or transfer to the other party.

Question 23

Dyer vs. National By-Products, Inc.

Accepted Answer

Forbearance from filing an unmeritorious legal claim that the party in good faith believes is valid constitutes sufficient consideration for a settlement agreement. R§74.

Question 24

Pre-existing Duty Rule

Accepted Answer

past consideration cannot serve as present consideration. Replaced by modern rule of R§89. Courts still use this pre-existing duty rule however if modern rule cannot be satisfied.

Question 25

Restatement §89

Accepted Answer

Allows modifications to initial contract for three reasons. 1)made before full performance of initial contract on either side 2)unanticipated reasons 3)modification is fair and equitable

Question 26

Angel vs. Murray

Accepted Answer

Restatement §89.  Court found payment of $20,000 to Maher to be enforceable modification despite initial contract bc it was unanticipated.

Question 27

Hold-up Game

Accepted Answer

purpose of pre-existing duty rule is to prevent this; deters parties from using coercion and duress to obtain additional compensation. Widely criticized as a rule of law however bc growing doubt as to a soundness of the rule as a matter of social policy

Question 28

UCC §2-209

Accepted Answer

no consideration necessary to be binding in an agreement to modify a contract so long as the parties voluntarily agree to the modifications, satisfy state of frauds, and separate signed agreement form.

Question 29

Restatement §73

Accepted Answer

Performance of a legal duty is not consideration unless it differs from what was required by the duty in a way that reflects more than a pretense of a bargain.

Question 30

Executory Contracts

Accepted Answer

An executory contract is a legally binding agreement where both parties have obligations that are not yet fulfilled. Examples include leases and contracts for the sale of goods (UCC).

Question 31

Discharge of Duty

Accepted Answer

When parties are no longer bound to their original agreement/performance of duty. Part or all can be discharged by parties through mutual assent and fresh consideration in certain situations.

Question 32

Restatement §74

Accepted Answer

Settlement of Claims--if someone has a good faith belief that something is valid at the time it is valid consideration even tho invalidity may become clear later.

Question 33

Inducement

Accepted Answer

persuading someone into entering or motivated by entering for benefit. (Can also be replaced by the word seeking)

Question 34

Promissory Estoppel

Accepted Answer

R§90.  Doctrine that allows a plaintiff to recover damages, despite no actual contract, when the defendant made a promise that the plaintiff detrimentally relied upon, and the plaintiff's reliance on that promise was reasonable.

Question 35

Doughtery vs. Salt

Accepted Answer

A promise becomes an enforceable contract only when some consideration is provided by all parties involved. Dougherty provided no consideration for his aunt’s promise

Question 36

Kirksey vs. Kirksey

Accepted Answer

Plaintiff and defendant have a falling out and defendant tells plaintiff to vacate entirely after placing her on a little shack in the woods. No consideration bc the little shack was gratuitous by defendant. Gift with a condition.

Question 37

Consideration to be upheld in the courts, it must be something (no set price, amount, time, etc. bc that is hard to enforce) as long as there is  something there (nominal) then there is consideration no matter what. Pepper corn theory.

Accepted Answer

True! Think of Appeal of Clark when the promissory note was for $700 bc the amount of work by the Clarks was prob worth way more than that.

Question 38

If there is consideration the contract is formed whether you think someone got a good deal or not as long as it’s a promise the law shall enforce.

Accepted Answer

True! Think of the Dougherty vs. Salt case

Question 39

Mattei vs. Hopper

Accepted Answer

"good faith" obligation makes a promise not illusory and buyer cannot say for no reason a contract is no longer valid.

Question 40

Fiege v. Boehm

Accepted Answer

If consideration was found to be in good faith regardless of if it's later found to be invalid, are still good settlements. (Bastardy case of who is the father, mother believed in good faith who father was)

Question 41

___ is seeking ($50) and _____ is seeking (a bicycle). Or, _______ is induced by the $50 and ____ is forbearing from drinking alcohol.

Accepted Answer

Reciprocal inducement chart. Bargained for Exchange Theory diagram.

Question 42

Types of modifications

Accepted Answer

Agreement of Mutual Recession, Substituted Contract, Novation, Accord and Satisfaction, and Substituted performance.

Question 43

Agreement of mutual recession

Accepted Answer

Parties can rescind an agreement by a subsequent promise as long as it has not been fully performed by either party. Satisfied preexisting duty rule and is valid consideration bc each party gains a benefit from getting out of its performance obligations.

Question 44

Substituted contract

Accepted Answer

promise in  substitute for an original duty. If someone does something gratuitous, they're painting your house under contract, you ask them to paint the garage as well and they don't, u can't hold them for breach of contract for not painting the garage.

Question 45

Novation

Accepted Answer

substituted contract and bring in a new third party. Can only sue on the novation and not original contract. Rental agreements.

Question 46

Accord and Satisfaction

Accepted Answer

Agreement for giving up a right or claim under a prior contract. Ex; contract and employer settle on a different amount that previously discussed. You need both the accord and satisfaction for the discharge to happen.

Question 47

Substituted Performance

Accepted Answer

Different performance not a promise. Change of performance requires fresh consideration. Some performances lack consideration and are therefore ineffective.

Question 48

Birdsall case

Accepted Answer

Substituted contract; there is consideration and real estate agent would be getting more money (additional 10% in interest).

Question 49

Lawrence case

Accepted Answer

Plaintiff could not successfully sue the hospital for breach of contract after they told her to not get an abortion. Think about it from the hospitals POV and it makes sense!

Question 50

Reliance

Accepted Answer

a legal concept in contract law that refers to when a person acts on/ depends on the statement, claim , or promise of another person or entity.

Question 51

Promissory Estoppel

Accepted Answer

R§90. In order to prevail on promissory estoppel there must be a promise in which the promisee relies on the promise of the promisor. Acts as a substitute when there is no bargained for exchange. Party relies to their detriment on a promise. (Conrad)

Question 52

Promissory Restitution

Accepted Answer

R§86. Allows someone to recover compensation for services rendered when there was no real contract. Equitable alternative to consideration that makes a promise binding when it lacks consideration. Promises to pay after receiving some benefit. (Mills)

Question 53

(Non-promissory)  Restitution

Accepted Answer

R§86. Legal principle that allows a person to recover damages when someone else acts to protect a persons property or person w/o their consent; usually in emergency situations. Applies to parties unjustly enriched at the expense of another. No promise.

Question 54

"Unjustly Enriched"

Accepted Answer

R§86. Subject to liability. Contract is implied in law for remedy purposes no actual contract between parties under the law. Unfair for someone to keep the benefit when provided in situations when there was no promise. (Nursing Care Services v. Dobos)

Question 55

Quasi-Contract

Accepted Answer

Also known as an implied contract, restitution, and unjust enrichment. "Almost but not quite a contract". P conferred a benefit w D knowledge and it would be inequitable for D to retain benefit and not pay P.

Question 56

Reliance Damages

Accepted Answer

Compensate promisee for expenses or costs incurred in reliance on the existence of the promise. Seek to put the promisee in the position she would be in today if the promise had not been made.

Question 57

Restitution Damages

Accepted Answer

Benefits have been conferred on a party and damages seek to put disadvantaged party back in position before promise was made.

Question 58

Restatement §90

Accepted Answer

If the promise causes the other party to do something even if it fails the bargained for exchange theory and no consideration exists, that promise may be binding as long it can only avoid justice to the party by the promise being enforced

Question 59

Restatement §86

Accepted Answer

Past consideration is insufficient unless there is a moral obligation + subsequent promise. Gift is not consideration.

Question 60

Restatement §4

Accepted Answer

How a Promise May be Made-- express or implied contract; Quasi-Contract.

Question 61

Restatement §158

Accepted Answer

Relief for injustice if restitution is deemed appropriate based on the circumstances.

Question 62

Conrad v. Fields

Accepted Answer

No consideration bc Conrad did not promise to go to law school. List elements of promissory estoppel. Conrad recovered reliance based relief. ($87,314.63 tuition plus books minus payment made by appellant)

Question 63

Hayes vs. Plantations Steel Co.

Accepted Answer

No consideration. Hayes did not win on promissory estoppel either. He was going to retire either way and was not planning to relay on getting his pension.

Question 64

Maryland National Bank vs. United Jewish Appeal of Greater Washington

Accepted Answer

A gracious promise to pay a charitable organization. A definite sum of money w/o any legal consideration is unenforceable.

Contracts Midterm #2

Modules 5-6

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