1. CONSIDERATION Chapter 3

2. ELEMENTS OF CONSIDERATION • Consideration: Legal detriment/Legal benefit bargained for and given in exchange for a promise of action. • Consideration has two elements: • 1.There must be a bargained for exchange. • 2.What is bargained for must have legal value.

3. Legal Sufficiency of Consideration • Something of legal value must be given in exchange for a promise. • It may be a return promise or performance. • If it is performance, that performance may be • (1) an act (other than a promise); or • (2) a forbearance (refraining from action)

4. Legal Detriment / Legal Benefit • Legal detriment is not always economic detriment. A person can incur legal detriment by (1) doing or promising to do something that he or she had no prior legal duty to do or (2) refraining from or promising to refrain from doing something that he or she had a prior legal right to do. (that is, by forbearance).

5. Adequacy of Consideration • Normally, a court will not question the • Adequacy of consideration unless it indicates: fraud, duress, incapacity, undue influence, or a lack of bargained-for exchange.

6. Contracts that Lack Consideration • Preexisting Duty • A promise to do what one already has a legal duty to do. No legal detriment • Past Consideration • Promises made with respect to events that have already taken place. Not bargained for and given in exchange

7. Illusory Agreements If the terms of a contract • Express such uncertainty of performance that the promisor has not definitely promised to do anything, or • Reserve, the right to cancel or withdraw at any time without cause the promise is illusory ,without consideration and unenforceable.