Category: Contract law

What is insufficient consideration?

Studying US contract law you will probably learn that consideration must be “sufficient. ”  But this does not mean that there must be “enough”  consideration.  Consideration must be “legally” sufficient. The general rule in the US is that courts don’t worry about the amount of consideration.  For example, if David offers to clean Patty’s car for $75 a court probably won’t worry about whether the job is worth more or less money.  As long as no deception was involved it probably won’t matter if Patty should have paid $10 or $100.  Court don’t usually concern themselves with the amount of consideration. But courts will worry about legally sufficient consideration.  For example, past consideration is not legally sufficient consideration. If David gives Patty an apple on Monday as a present and Patty is so happy she says she’ll give David a pear the following day, there is no contract.  Patty does not have to give David a pear on Tuesday.   Patty and David did not agree to give a pear in exchange for an apple. Below is an older video on an example of legally insufficient consideration: Get a Civ Pro Quiz Ebook! 101 Civ Pro Questions and Explanations...

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When may an offeror revoke a unilateral contract?

As a reminder, a unilateral contract is where an offeree accepts through performance.  A common example that professors like to use is: A says to B, “If you walk across the Brooklyn Bridge, I’ll pay you $100.”  To get paid, B must cross the bridge.  Promising to cross the bridge is not enough. Our traditional rule is that A can revoke this offer until B completes performance.  So if B starts walking across the bridge, A can say, “I take back my offer!”  Now B does not get paid even if she crosses the bridge because A revoked the offer. The modern rule is different – – unilateral contracts cannot be revoked once performance begins. That is, if B starts performing, A cannot revoke the offer.  In the above example, if B is crossing the bridge,  A cannot revoke the offer. Below is an older video which discusses terminating offers. Around the 3:50 mark the video  discusses revoking unilateral...

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What is promissory estoppel?

Promissory estoppel is a doctrine which provides that, under certain circumstances, a person should be liable for breaking a promise, even if we don’t have all the elements necessary  to form a contract. Remember, contracts require, among other things, consideration.  By consideration, courts mean each party gives something and each party gets something in exchange.  If A promises to pay $100 and B promises to sell his watch, the parties are exchanging promises.  We have a contract because there is an agreement and consideration.   But what happens if we have a gratuitous promise?  For example, let’s say A promises B $100 but doesn’t ask for anything in return.  This is not a contract.  If B asks for the money A can tell B he changed his mind and there is no liability for the broken promise. So far so good.  But what if the situation becomes unjust because B relied on A’s promise.  For example, let’s say Uncle Unkind tells his nephew, who is working a tough job and going to school, that he’ll give him $100,000.  And let’s say Uncle Unkind should reasonably expect that the nephew will quit his job to focus on his studies based on this promise. If the nephew quits his job and asks the Uncle for money, what is the result? Keep in mind that the Uncle made a gratuitous promise.  He didn’t say, “If you agree to quit...

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What is an Offer?

An offer, together with acceptance and consideration, is one of the elements needed  to form a contract under US law.  The offer provides a counterpart  (sometimes called an offeree) with the power to accept a deal and to form an agreement. To identify an offer  make sure that one party, the offeror, is unambiguously communicating his intention to enter into a deal if the offeree agrees.  If Mr. A offers $100 to Mr. B to paint his fence, this should be an offer because if B agrees, we would have an agreement to paint a fence.  On the other hand, if A is simply thinking of offering B $100, that’s not an offer, because it hasn’t been communicated. Also, If Mr. A tells Mr. B that he’s thinking about hiring someone to paint his fence and would consider paying around $100, that’s also not an offer.  Mr. A sounds like he’s trying to negotiate with Mr. B.  Below is a video on the offer.  I have more content up already on Udemy....

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When is duress a defense in a contract case?

Very rarely! A party can argue that he does not have to perform a contract if he was forced to sign the contract.  A simple example would be if a salesperson pointed a gun at a customer and said, “Sign the contract or I’ll shoot you.”  Obviously that should not be a contract. The customer did not have a meaningful choice to sign the contract or not so he is not legally bound by his promise. If one party makes an improper threat, and the other party does not have a choice, we say there was duress.  Sometimes an economic threat is less obvious than pointing a gun but can still be improper.  For example, let’s say Mr. B is in a bad financial position and desperately needs his job to support his family.  Let’s say Mr. A can cause Mr. B to lose his job.  Now Mr. A threatens Mr. B that if he does sign a contract t he’ll cause Mr. B to lose his job.  This sounds like duress because Mr. B did not have a meaningful choice but to sign the contract and Mr. A improperly threatened to cause Mr. B to lose his job. Don’t confuse economic duress with someone trying to get the possible deal for himself.  If I own a classic car and I know you really want to buy the car...

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