Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western

CHAPTER 8Consideration

8-1 Types of Consideration

8-2 Questionable Consideration

8-3 When Consideration Is Not Required

Chapter 8Slide 2

Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western

8-18-1 Types of Consideration

GOALS Identify the three requirements of

consideration Recognize the various forms of

consideration

Chapter 8Slide 3

Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western

FOCUS

List five promises you have recently made.

Beside each promise list what you received in return.

Review the list and place a check by the promise(s) that you believe would be legally binding on you if the promisee pursued the issue in court.

Chapter 8Slide 4

Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western

CONSIDERATION

Act, forbearance, or promise Trading Legal value Adequacy of consideration Nominal consideration

Chapter 8Slide 5

Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western

List the three requirements of consideration.

Chapter 8Slide 6

Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western

8-28-2 Questionable Consideration

GOALS Describe situations in which

consideration is present only under limited circumstances

Recognize when what appears to be binding consideration is not

Chapter 8Slide 7

Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western

FOCUS

Scenario Ms. Miller tells her students: “You have

worked hard, and if you continue to perform at this high level, I'll pay for a pizza party at the end of the year—if I think it is warranted.” The students continue to work hard, and class grades are high, but no party is given.

Question Can the students enforce the promise?

Chapter 8Slide 8

Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western

CIRCUMSTANTIAL CONSIDERATION

Illusory promises Termination clauses Output and requirements contracts

Chapter 8Slide 9

Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western

Tom Waits

Thomas Alan "Tom" Waits (born December 7, 1949) is an American

singer-songwriter, composer and actor.

Chapter 8Slide 10

Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western

CIRCUMSTANTIAL CONSIDERATION

Existing duty Existing public duty Existing private duty Settlement of liquidated debts Settlement of unliquidated debts Release Composition of creditors

(continued)

Chapter 8Slide 11

Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western

FALSE CONSIDERATION

Mutual gifts Past performance

Chapter 8Slide 12

Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western

What distinguishes a gift from a valid contract?

Chapter 8Slide 13

Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western

8-38-3 When Consideration Is Not Required

GOALS Distinguish situations in which

consideration is not needed Recognize when the doctrine of

promissory estoppel can be applied

Chapter 8Slide 14

Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western

FOCUS

Why are exceptions to the doctrine of consideration needed?

Chapter 8Slide 15

Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western

EXCEPTIONS TO THE REQUIREMENT OF CONSIDERATION

Promises to charitable organizations Promises covered by the UCC

Firm offers Modifications

Promises barred from collection by statute Statute of limitations Debts discharged in bankruptcy

Promissory estoppel

Chapter 8Slide 16

Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western

Name four exceptions to the requirement of consideration.