Chapter 14

Summary

In this educational video, the concept of 'consideration' in contract law is explored, distinguishing it from its everyday meaning of kindness or empathy. The script explains that consideration is an essential element of a contract, representing the exchange of value between parties. It clarifies that forbearance from illegal activities does not constitute valid consideration. The lecture uses relatable examples, such as trading a Malibu condo for sobriety, to illustrate the necessity of a bargained-for exchange. It also covers scenarios like promissory estoppel and part payment of checks, emphasizing the importance of understanding the elements of a contract to avoid legal pitfalls.

Takeaways

• 📚 Consideration in law is different from its everyday meaning; it refers to what each party gives up in a contract.
• 🤝 For a contract to be valid, there must be an offer, acceptance, and consideration.
• 💰 Consideration can be money, services, property, or the forbearance of a legal right.
• 🏠 An example of consideration is forbearing from drug use in exchange for a valuable asset like a Malibu condominium.
• ❌ Forbearance from an illegal act does not count as consideration because it's not a legal right.
• 🚫 Courts do not determine the adequacy of consideration; it's up to the parties involved in the contract.
• 🔄 The concept of forbearance involves giving up a legal right in exchange for a promise.
• 🏡 An example of a pre-existing legal obligation is a police officer's duty to patrol a neighborhood.
• 🚫 Cashing a part payment check can be seen as accepting a counteroffer, potentially forfeiting the balance owed.
• 📖 The doctrine of promissory estoppel can apply when there's no consideration, with four specific elements required.
• 🎓 Homework for chapter fourteen involves applying concepts like promissory estoppel and forbearance.

Q & A

What does 'consideration' mean in regular English as opposed to legal terms?

In regular English, 'consideration' means kindness, empathy, thoughtfulness, but in legal terms, it refers to what each party to a contract gives up to the other party in making their agreement, essentially a bargain for exchange.

Why is consideration necessary for a contract?

Consideration is necessary for a contract because it ensures that there is a bargain for exchange between the parties. Without consideration, there is no enforceable contract, as it would merely resemble a gift.

What are the elements of a contract as mentioned in the script?

The elements of a contract mentioned in the script include an offer, acceptance, and consideration.

What is the difference between a gift and consideration?

A gift is a voluntary transfer without receiving anything in return, whereas consideration involves giving or promising something of value in exchange for the performance or promise of performance to the other party.

Can forbearance be considered as a form of consideration?

Yes, forbearance can be a form of consideration if it involves giving up the right to do something one has a legal right to do in exchange for a promise of something else.

What is an illusory promise according to the script?

An illusory promise is a promise that is not enforceable because it lacks consideration or is not based on a genuine intention to be bound by the promise.

What is a pre-existing legal obligation and how does it relate to consideration?

A pre-existing legal obligation is a duty that one is already required to fulfill by law, and it cannot serve as consideration because it does not involve giving up something of value that one has a legal right to withhold.

What happens if you cash a check that is marked 'payment in full' but only covers part of the agreed amount?

Cashing such a check is considered accepting a counteroffer and implies that you have accepted the part payment as full settlement, thus losing the right to claim the balance.

What are the four elements of promissory estoppel?

The four elements of promissory estoppel are: 1) A promise made without consideration, 2) The promisor should reasonably expect the promisee to rely on the promise, 3) The promisee does rely on the promise in a substantial manner, and 4) Enforcement of the promise is necessary to avoid injustice.

How can promissory estoppel be applied in scenarios where consideration is missing?

Promissory estoppel can be applied when all four elements are present, allowing a court to enforce a promise despite the absence of consideration, to prevent injustice and protect those who have detrimentally relied on the promise.

What is the importance of distinguishing between a gift and consideration in contract law?

The importance lies in determining whether an agreement is enforceable as a contract. A gift does not create a contract, whereas consideration is a necessary element for a contract to be legally binding.