elements of a contract offer acceptance genuine agreement consideration capacity legality
DESCRIPTION
Consideration Consideration is the exchange of benefits and detriments by the parties to an agreement. Benefits – something that a party was not previously entitled to Detriments – Any loss sufferedTRANSCRIPT
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Elements of a Contract• Offer• Acceptance• Genuine Agreement• Consideration• Capacity• Legality
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Consideration
• Consideration is the exchange of benefits and detriments by the parties to an agreement.
• Benefits – something that a party was not previously entitled to
• Detriments – Any loss suffered
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Void or Voidable
Certain agreements lack consideration and consequently are unenforceable:
• Gifts• Promise to obey the law• Fulfill another preexisting duty
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Gifts
• A gift is something that is given freely, not providing consideration.
• Once given, a gift has the status of an executed contract.
• The promise of a gift is not enforceable.
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Promise to Obey the Law
• Since everyone is obligated to obey the law, a promise to do so is not detriment.
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Preexisting Duty
• If a person is already under legal duty to do something, a promise to do that same thing does not furnish consideration.
• Ex: a police man asking for a reward for catching a criminal
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Past Consideration
• Giving or exchanging benefits by the parties must take place when the contract is made.
• If consideration took place in the past or is given for something that has already been done, the courts will not regard that consideration as legal.
• The courts will not enforce any contract based on past consideration.
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Illusory Promise• Illusory – has false appearance• Some contracts are illusory; at
first glance they appear to bind both parties. Under further examination, it is clear that they do not.
• Ex: One person agrees to buy all of the apples that they purchase from Erin’s Apple Farm over a the next year. Neither knows how much, if any will be purchased.
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Adequacy
• Courts do not usually look at whether the contract is fair to both parties or not.
• Occasionally a court may refuse to enforce a contract or a portion of it if the court finds the contract unconscionable.
• Unconscionable – The contract is so one-sided that it unfairly oppresses one party and unreasonably favors the other party.
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Promises Enforceable With Out Consideration
• Some promises are enforceable without consideration if the promise influences the behavior of another. If they are not enforced, those relying on them may suffer damages.
• This is called promissory estoppel.• Ex: Pledges and Subscriptions
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By: Aly Matuck
Annie SheltonMikey Frost