1 george mason school of law contracts i consideration f.h. buckley fbuckley@gmu.edu

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George Mason School of Law

Contracts I

Consideration

F.H. Buckley

fbuckley@gmu.edu

Six Questions

1. Definition: Benefit-Detriment and Bargain Theory

2. Family Promises3. The Effect of a Seal4. Adequacy of Consideration and

Nominal Consideration5. Past consideration rule6. Relevance of Motive

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The need for a consideration

Requirement of a Bargain § 17(1), 71 Agreement and Bargain: § 3

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The need for a consideration

What was the consideration in Hamer v. Sidway at p. 42?

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The need for a consideration

What was the consideration in Hamer v. Sidway at p. 42?

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The nephew was going to the dogs…

Hamer v. Sidway

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What is the benefit-detriment standard? Do we have to ask whether it was an

unpleasant detriment? Or whether it was a benefit to the uncle?

Hamer v. Sidway

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What is the benefit-detriment standard? Can you suggest why the uncle might

have intended that the promise be legally enforceable?

Kirksey p. 128

Why did Isaac invite Antillico to Talladega?

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It wasn’t to see the speedway…

Kirksey

Why did Isaac invite Antillico to Talladega county? Was there a benefit to Isaac? A detriment to Antillico?

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Kirksey

Why did Isaac invite Antillico to Talladega county? Was there a benefit to Isaac? A detriment to Antillico? Williston’s tramp at p. 130?

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Family Promises

Do you think Isaac intended legal liability? The problem of family promises

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St. Peter v. Pioneer p. 43

Why didn’t the theatre restrict bank night to paying patrons?

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St. Peter v. Pioneer

Why didn’t the theatre restrict bank night to paying patrons?

So was there a contract with non-paying people waiting outside?

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St. Peter v. Pioneer

Why didn’t the theatre restrict bank night to paying patrons?

So was there a contract with non-paying people waiting outside?

How was the Π to accept? Unilateral vs bilateral

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St. Peter v. Pioneer

“The requested acts were bargained for” Restatement § 72 Can you articulate why the theatre might

have wanted the promise to be binding? Recall Lefkowitz

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The Bargain Theory

Was Kirksey a bargain situation? What about Hamer v. Sidway? Spiedel at 134 on the move to a

capitalist economy Is something else going on with family

promises?

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The Bargain Theory

How would you define it? You and I want to set a date for lunch but

quarrel over the date. Is this bargaining?

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What if there’s no bargain:Gratuitous Promises

Uncle Ebenezer might want to bind himself? So how does he do so? At common law, a gift is effective if:

Donative intent (animus donandi), Delivery by donor, and Acceptance by donee

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What if there’s no bargain:Gratuitous Promises

Uncle Ebenezer might want to bind himself? So how does he do so? What constitutes delivery by donor?

Actual delivery of gift Constructive delivery (e.g. key to car or

house) Deed of gift

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What if there’s no bargain:Gratuitous Promises

But what if he doesn’t have anything to give at that point and can only promise to give in the future?

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The seal

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The seal

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Definition: Restatement § 96

Effect of seal: Restatement § 95(1)

Statutory abolition?

The Adequacy of Consideration

Wolford v. Powers 141 Could a court measure the difference in

values?

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Wolford v. Powers

What was the consideration from the Wolfords? “be it ever so small”: Restatement § 79

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A peppercorn

Lon Fuller on Considerationp. 135

The evidentiary function Evidence that a promise exists

The deterrent function a check against rash promises

The channeling function “channels for the legally effective

expression of intention”

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Lon Fuller on Consideration

Does all this simply come down to the intention to be legally bound?

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Is that all there is?

Re Greene p.130What was the consideration?

What do you think was going on here?

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Re GreeneWhat was the consideration?

“for one dollar and other good and valuable consideration” Nominal consideration vs. Adequate

consideration What if they had added “the receipt and

adequacy thereof is hereby acknowledged”

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Re GreeneWhere was the consideration?

What about the seal?

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Nominal Consideration

Suppose I promise to give you $1,000 in return for $1? Schnell v. Nell (p. 146)

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Schnell v. Nell (p. 146)

A promise of $600 to honor wife’s promise in will consideration of: Promise in will one cent love and affection for deceased wife

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Batsakis p.139

Is this a case of nominal consideration?

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Batsakis p.139

What happened threeweeks later

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Athens, April 27 1942

Batsakis p.139

Why did they structure the April 2 loan of $25 as a loan of $2,000 at 8 per cent? Is this a case of nominal consideration? Recall Aquinas’ Starving City

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The Past Consideration Rule

Restatement § 86 Note that there was past consideration in

Wolford

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Past Consideration

A reward is offered for apprehension of a thief. Policeman catches thief in performance of his duties. Is there consideration?

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Past Consideration

A reward is offered for apprehension of a thief. Policeman catches thief in performance of his duties. Restatement § 73, illustrations 1 and 2

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Past Consideration

A reward is offered for apprehension of a thief. Policeman catches thief in performance of his duties. Why is this a sensible policy?

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What’s wrong with a public official charging for services?

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I don’t get it…

Performance of Prior Legal Obligation

Compromise with creditors? Restatement § 73, illustrations 5 and 6

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Does the offeree’s motive matter?

Williams v. Carwardine (p. 147) “believing that she has not long to live,

she makes this voluntary statement to ease her conscience, and in hopes of forgiveness hereafter”

Restatement § 81(1)

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Mutuality of Obligation

Either both are bound or neither is bound Restatement § 79: not a separate requirement Inapplicable in unilateral contracts

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