Consideration and Promissory Estoppel

legal value, bargained for and given in exchange for an act or a promise. Cannot be enforeced unless promisee has given up something of legal value in exchange for the promise
legal value
in exchange for promisor’s promise, the promisee does, or agrees to do, something he had no prior legal duty to do, that provides legal value
adequacy of consideration
as long as the promisees acts or promies satisfies the legal value test, courts don’t ask whether act or promisewasworth what promisor gave or promised to give in return for it
exceptions to adequacy of consideration
a dela that is on its face wrong (500 for 1000 of goods), gross inadequacy of consideration may give rise to fraud, duress, lack of capacity, unconscionability
Franchise Holdings LLC v. Huntington Restaurants
Huntington says agreement not valid. Court differs by saying that paying on schedule was a duty already, no legal challenge was also a duty already, Plaintiff ha ways to gain Defendant’s financial data not gratuitiously.
bargained for exchange
if no bargain then no consideration
Gottlieb v. Tropicana Hotel and Casino
Gottlieb alleges she spun the million on the casino lotto machine, casino disagrees on consideration grounds. She gave consideration by allowing them to use her data and to wait in line to participate in this venture, and was a part of casino entertainment
illusory promiise
if the promise doesn’t bind the promisee to do or refrain from doing anything, such a promise isn’t consideration
is a cancel whenever clause illusory?
Yes because you can opt out at any time, however a 30 day notice is good because each party bounds to do something at the end of this
Day v. Fortune Hi Tech Marketing
we got a Ponzi scheme, but the fact that Ponzi could get out of contract at any timevoided it
output contracts
one party agrees to buy all of other partys production of a commodity
requirements contracts
common business transactions that serve legitimate business purposes
good faith UCC
can’t charge more for something because market prices went up on output or requirements contract
Code on exclusivity
unless parties agree to the contrary, an exclusive dealing contract imposes a duty on the distributor to use her best efforts to sell the goods and imposes a recirprocal duty on the manufacturer to use his best efforts to supply the goods
preexisting duty
if the duty already exists there is no consideration
public duty
you have a duty not to break the law fam
modification of contract
you need a new independent negotiation to be binding. So promising to pay an extra 50000 because of building costs not expected isn’t enforceable because there is no new consideration
Margeson v. Artis
Agreed to sell the company for a certain price and then engaged in a unilateral price hike. Margesons failed to prduce any evidence to show they promised to do more than they hadpromised to do under the first agreement
UCC Contract Modification
no new consideration necessary to enforce the promise. NO duty to agree to modification though, subject to scrutiny under good faith. If OG agreemet requires modification in writing, has to be inwriting, if 500 or more, modification is uneforceable unless fraud requirements are satisfied
liquidated debt
debt that is both due and certain, the parties have o good faith dispute about either existence or the amount ofthe OG debt. Creditor’s promise to discharge a liquidated debt for part payment of debt at or or after due date is uneforceable for lack of consideration.
unliquidated debt
good faith dispute about either existence or amoutn of debt makes it uneforceable. Settlement called accord and satisfaction. If someone pays you less than you believe things are worth you can dispute it but courts take five ever so you might just have to take the check for payment in full for all goods received
composition agreements
agreements between a debtor and two or more creditors who agree to accept as full payment a stated percentage of their liquidated claims against the debtor at or after the date on which those claims are payable. Do it to get more than in bankruptcy agreements.
forebearance to sue
an agreement by a promisee to refrain, or forbear, from pursuing a legal claim against a promisor can be valid consideration to support a return promise, usually to pay a sum of money– by a promisor. The promisee has agreed not to file suit, something that she has a legal right to do, inexchange for the promisor’s promise. Promisee must have good faith belief in the validity of his or her claim before forbearance amounts to consideration.
past consideration
this isn’t consideration. It is an act or other benefit given in the past that was not given in exchange for the promise in question. Past act wasn’t given in exchange for the present promise, it isn’t consideration.
moral obligation
these are not enforceable due to lack of consideration. Promisor or some member of promisor’s family received benefit from promisee in past would not constitute consideration for a promisor’s promise to pay for that benefit, due to absence of bargain element
What the heck happened in Doe v. Roman Catholic Archdiocese of Indianapolis?
Doe was sexually abused by the priest and her husband argued that morally the church should pay for her therapy. Church paid for therapy and counseling but six years later Doe had no signs of recovery after $100000 investment. Church counsels health professionals against advice of psychaistrist and therapist of Doe, reduce sessions from twice a week to one per month. Doe would have to pay for her own if church didn’t.

Doe understood that the church had no legal responsibility at this time. A promise must be predicated with adequate consideration before it can command performance. Moral obligation isn’t enough consideration to support enforcing an agreement nor does it create a contract.

Letters to Doe to assist with counseling costs isn’t unlimited care and treatment.

promissory estoppel in relation to consideration
a promisethat the promisor should reasonably expect to induce reliance, reliance on teh promise by the promisee, and injustice to the proiseas a result of that reliance. Widely used as a consideration substitute in donative promisecases and when contemplating bargained for exchange
What the heck happened in McLellan v. Charly?
McLellan financed Bogle to buy a property that would stick it to UW Madison. Bogle can buy property within 180 days with opportunity to extend for another 90 days. UW Madison offers higher contract after Bogle throws a rally and Charly’s attorney told him that the option to purchase from Bogle lacked consideration. Sent letter to McLellan to that effect.

McLellan informed no enforceable option and property not sold to him. Trial court says breach of contract with valid consideration for specific performance, no basis for estoppel. Appellate court determined valid option contract requires consideration distinct from consideration that supports underlying contract. McLellan had to gig of legal value for Charly bargained for in 180 day option different from value Charly sought in sale of property.

Court intent to be bound isn’t sufficient for consideration. Charly might’ve wanted to stick it to people but there was no requirement in teh written agreement between parties that property would be used for museum.

Higher offer by University can’t be said to be related to bargaining. No evidence that Charly requested anything be done with respect to financing, McLelland didn’t do anything with it.

No evidence for consideration for the sale separate from the option. Not binding because could be withdrawn at any time.

Promissory Estoppel– no because the initial promise was preliminary and Bogle couldn’t rely on that.


promises to pay debt barred by bankruptcy discharge
bankrupt debtor is granted a discharge creditors don’t have legal right to collect debt any longer
statute of limitation debt collecitons
require new promise afterwards to be in writing to be enforceable
charitable subscriptions
promises for these are enforced despite consideration absence because charity relies on this