BLW 201 Ch. 12

• the inducement to enter into a contract
• legal sufficiency and bargained-for exchange

consists of either a benefit to the promisor or a detriment to the promise

two types: legal benefit and legal detriment

obtaining something to which one had no prior legal right

doing an act one is not legally obligated to do or not doing an act that one has a legal right to do

not required where the parties have freely agreed to the exchange

• promise that imposes no obligation on the promisor
• not including: output contract, requirements contract, exclusive dealing contract, or conditional promise

agreement to sell all of one's production to a single buyer

agreement to buy all of one's needs from a single producer

grant to a franchisee or a licensee by a manufacturer producer

one where the obligations are contingent upon the occurrence of a stated event

public duties such as those imposed by tort or criminal law are neither a legal detriment nor a legal benefit

performance of a preexisting contractual duty is not consideration

under the common law a modification of a preexisting contract must be supported by mutual consideration; under the Code a contract can be modified without new consultation

the parties agree to rescind their original contract and to enter into a new one; rescission and new contract are supported by consideration

payment of a lesser sum of money to discharge a disputed debt (one whose existence or amount is contested) is legally sufficient consideration

a mutually agreed-upon exchange

an act done before the contract is made is not consideration

a new promise by the debtor to pay the debt renews the running of the statute for a second statutory period

may be enforceable without consideration

a new promise to perform a voidable obligation that has not been previously avoided is enforceable

a promise made to satisfy a preexisting moral obligation is generally unenforceable for lack of consideration

doctrine that prohibits a party from denying her promise when the promisee takes action or forbearance to his detriment reasonably based upon the promise

where still recognized, the seal acts as a substitute for consideration

some gratuitous promises have been made enforceable by statute; the Code makes enforceable (1) contract modifications, (2) renunciatjions, and (3) firm offers