Need consideration for a contract

• Consideration needs to demonstrate a willingness to enter a contract
  • Ex. In consideration of my doing “this” for you, you will do “that” for me.

Common Law Definition: Benefit to promisor, detriment to promisee.

• Ex. In consideration of my fixing your roof, you will pay me $1000.  Benefit to me is the $1k, deteriment to promisee is $1k

Another definition: Bargain for exchange

• 2 ends of the exchange/bargain
• Differentiate between condition and detriment
  • Promise for
    • a promise
    • an act

False Consideration

• Consideration must be unique and new to the contract
  • “Fresh Consideration”– Benefits/detriments must be new
    • Ex. Owe money already for work done cannot be applied to new contract
• Moral Consideration

Illusory Promise

• Promises can serve as consideration
  • I promise to do this, if you promise to do that.
• However, illusory: I promise to give you this book if you promise to do anything in return.
  • Contract must include understood terms and consideration
  • Unrestricted right to cancel is illusory because the promise could never be carried out.
  • Act done to meet the satisfaction of a party is illusory because the
    • Unless term is included that objectifies the satisfaction level
• Violation of mutuality makes a promise illusory
  • Condition, when promise comes/stops into effect
    • Promise goes into effect if condition is met
  • Condition subsequent: Promise extinguishes when a condition comes about.