blaw chapter 12

consideration

Something of value that is exchanged between parties in a contract, which makes the contract legally binding.

promisor

The person who makes a promise in a contract.

promisee

The person to whom a promise is made in a contract.

reciprocal promise

A mutual exchange of promises between two parties, where each party's promise serves as consideration for the other.

bargaining

The negotiation process between parties to reach an agreement on the terms of a contract.

benefit detriment test

A test to determine the existence of consideration by assessing whether a party benefits from the contract and/or suffers a detriment.

forbearance

The act of refraining from doing something that one has a legal right to do, which can serve as valid consideration in a contract.

legal obligation

A duty that is enforceable by law, arising from a contract, statute, or legal precedent.

public policy(unenforceble)

The principle that certain agreements violate societal norms, laws, or interests

gift(unenforceble)

A voluntary and non-reciprocal transfer of something valuable without consideration.

charitable subscription(may be enforceble)

A promise to donate to a charitable organization

illusory promise(unenforceable)

A statement that appears to be a promise but does not actually bind the promisor to any real obligation

good faith

The principle that parties to a contract must act honestly and fairly in their dealings

output contract

A contract in which one party agrees to sell all the goods it produces to another party.

requirement contract

A contract in which one party agrees to buy all the goods it needs from another party.

cancellation provsion

A clause in a contract that allows a party to terminate the agreement under certain conditions, often requiring notice or good faith.

preexisting legal oligations

Duties already required by law or contract, not valid consideration for a new contract.

contract for sale of goods(exception to pre existing legal obligation)

A commercial contract where the terms can be adjusted under the Uniform Commercial Code (UCC) due to unforeseen events.

compromise and release of claims(exception to pre existing legal obligation)

settling a dispute by agreeing to a reduced payment, releasing the remaining debt.

part payment checks(exception to pre existing legal obligation)

A partial payment that releases a debtor from the balance of a claim.

composition of creditors(pre existing legal obligations)

Creditors agreeing to accept a reduced payment when a debtor cannot pay in full.

past consideration(not valid consideration), no if

Actions or promises made before the contract

moral considration(Unenforceble)

A morally valued action

good and valuable consideration

Legally recognized value exchanged in a contract.

firm offer(exception to UCC)

A written commitment made by a seller that guarantees an offer will remain open for a specified period without requiring anything in return to keep it valid.

modification of sales contract

A change to an existing agreement involving goods, which can be legally binding even without an additional exchange of value, as long as it is made in good faith.

waiver of damages

A voluntary decision to give up the right to seek compensation for losses resulting from a broken agreement.

promissory estoppel(subsitute for consideration)

A legal principle that holds someone accountable for a commitment when another person has reasonably depended on it and suffered harm as a result.