Business law essay questions
bbbbbbbb
chapter11.pptConsideration
- Consideration means that there must be bargaining that leads to an exchange between the parties.
- Consideration can be anything of measurable value that someone might want to bargain for.
- A promisor is the person who makes the promise, and promisee, the person to whom the promise is made.
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.
- The thing bargained for can be:
An act—any action that the party was not legally required to do.
Forbearance—refraining from doing something that the party has a legal right to do.
Bargaining is obligating yourself in order to induce the other side to agree.
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.
… to either benefit one party or cause a party to suffer a detriment themselves.
OR
OR
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.
- Courts seldom inquire into the adequacy of consideration.
- The question of adequacy is for the parties to answer as they bargain. It’s not for the courts to second guess later when a lawsuit ensues.
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.
If one party’s promise is conditional, the other party is not bound to the agreement.
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.
- The UCC: Consideration in Requirements and Output Contracts
In a requirements contract, the buyer agrees to purchase 100 percent of her goods from one seller.
In an output contract, the seller guarantees to sell 100 percent of its output to one buyer, and the buyer agrees to accept the entire quantity.
Section 2-306 expressly allows output and requirements contracts in the sale of goods.
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.
- A promise to do something the promisor is already obligated to do is not consideration.
Exception: Additional work. When a promisor agrees to do something above and beyond what he is obligated to do, the promise is generally valid consideration.
Exception: Modification. If both parties agree to a modification, the best solution is to rescind the contract and draft a new one.
Exception: Unforeseen Circumstances. When unforeseen circumstances cause a party to make a promise regarding an unfinished project, that promise is generally valid consideration.
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.
- Liquidated Debt: A liquidated debt is one in which there is no dispute about the amount owed.
In cases of liquidated debt, if the creditor agrees to take less than the full amount as full payment, her agreement is not binding.
If the debtor offers a different performance to settle the debt and the creditor agrees, the agreement is binding.
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.
- Unliquidated debt: A debt is unliquidated if:
(1) the parties dispute whether any money is owed, or
(2) the parties agree that some money is owed but dispute how much.
- The parties may agree to settle for less than what is owed; this “accord and satisfaction” will be enforced if the debtor pays the agreed amount.
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.
- Common Law ruling:
If a debtor writes “Full Payment” on a check, and the creditor cashes it, the payment is in full whether or not it was the right amount.
- UCC §3-311
Affirms the Common Law ruling, but adds two exceptions:
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.
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.
- A non-compete agreement is an agreement in which an employee promises not to work for a competitor for some time after leaving the company.
- It used to be that these covenants were rare and reserved for top officers, but they have now become commonplace throughout many organizations.
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.
- Even in the absence of consideration, a court may enforce a promise if this will prevent a great injustice to the relying party.
- “Moral Consideration”:
Some courts will require donors to make good on their pledges to charities, even though the charitable organization has promised nothing in return.
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.
