Consideration Summary

A contract needs to be supported by consideration to be enforceable.

Have consideration if:

1. Detriment – promisee gives up something of value or circumscribes his liberty (suffer legal detriment).
2. Exchange – promise is given as part of a bargain. The promisor makes a promise in exchange for promisee’s suffering legal detriment.
   

Legal Detriment can consist of:

• act
• forbearance
• return promise
• act, forbearance or return promise by a third person
• promise or act by the promisee, delivered to a third person, rather than to the promisor

Two main types of transactions are enforceable with doctrine of  consideration.

1. Promises to make gifts
2. Party has not really promised to do something or given anything up.
   • Ex. Cases where parties in an existing contract modify it to the sole benefit of one of the parties.

Bargain Element:

• Promise to make gifts:
  • Promise to make a gift is usually unenforceable because of it lacks “bargain” element.
  • Meeting of the conditions needs to be bargained for.
    • Even if conditions must be met by promisee
      • However, if condition benefits promisor, bargain element probably will be present.
    • Once promisor makes gift, cannot rescind it for lack of consideration.
    • Only the promise that is unenforceable for lack of consideration.