ELEMENTS OF CONSIDERATION [4316]
���� Consideration, which must be given in order to make a contract legally binding, is legally sufficient and bargained-for value, given by the promisor in return for the promisee performing or refraining from performing some act which results in a detriment to the promisee and/or a benefit to the promisor. � A bargained for exchange in which there is a legal determinant to the promisor or legal benefit to the promise.�
����� Legally Sufficient Value may be established by: [4316.08]
[1]�� promising to do something that the promisor has no prior legal duty to do [e.g., promising to pay money for the promisor�s goods];
[2]�� performing an action that the promisor is not otherwise obligated to undertake; or
[3]�� refraining from exercising a legal right which the promisor is otherwise entitled to exercise.
����� In a bargained-for exchange, the consideration given by the promisor must induce the promiseeto incur a legal detriment and/or provide a legal benefit to the promisor, either or both of which are sufficient to induce the promisorto make the promise.
INSUFFICIENT CONSIDERATION [4316.07]
���� Pre-Existing Legal Duty: Under most circumstances, a promise to do [or refrain from doing] what one already has a legal duty to do [or refrain from doing] does not constitute legally sufficient consideration.
����� A commonly-recognized exception to the foregoing rule is the so-called �unforeseen difficulties� doctrine, which permits an existing contract to be modified to account for unforeseen difficulties that arise during the course of performance.
����� Past Consideration: Promises made in return for acts or events that have already taken place are unenforceable for lack of sufficient consideration.
����� Illusory Promises: If the terms of a contract call for performance in such uncertain terms that the promisor has not definitely promised to dQ [or refrain from doing] anything, the promise is unenforceable for lack of sufficient consideration.
� Moral obligation: while you may feel morally obligated, it doesn�t mean there is a legal obligation�.
RESCISSION AND NOVATION
������ The unmaking of an existing contract and making of a new contract between the same parties [e.g., to account for unforeseen difficulties] are known, respectively, as rescission and novation.
����� Rescission: Canceling an existing contract, and returning the parties to their pre-contract states [i.e., stopping it before it goes further and going back to where you were before the contract.]
����� Novation: Replacing an existing contract with a new, superseding contract between the same partie [continuing]
ACCORD AND SATISFACTION 4326.06
������ Accord and Satisfaction: An agreement between an obligor [debtor] and obligee [creditor], by which the obligor agrees to pay the obligee some amount owed under the contract [generally less than the amount in dispute] in exchange for a discharge of all obligations owed by the obligor to the obligee.
����� For accord and satisfaction to occur, the amount of the obligor�s debt to the obligee must be in dispute, or unliquidated.
������ Liquidated Debt: A debt whose amount has been ascertained, fixed, agreed on, settled, or exactly determined.
������ Unliquidated Debt: A debt whose amount may be disagreed on by reasonable persons.
RELEASES AND COVENANTS NOT TO SUE 4326.08/.09
����� Release: An agreement whereby one party forfeits its rights to pursue a legal claim against another party.
����� Releases are generally binding if they are:
[1]�� given in good faith,
[2]�� stated in writing, and
[3]�� accompanied by consideration.
����� Covenant Not to Sue: An agreement to substitute a contractual obligation for some other type of legal action based on a valid claim.
PROMISSORY ESTOPPEL
������� Promissory Estoppel: When a promisor makes a clear and definite promise on which the promisee justifiably relies, the promisor is bound by the promise, even if it was insufficient to form the basis of a valid, legally binding contract.� This is equitable relief.
����� For the doctrine of promissory estoppel to be applied, the following elements must be established:
[1]�� the promise was clear and definite;
[2]�� the promisee justifiably relied on the promise;
[3]�� the promisee�s reliance was substantial and of a definite character; and
[4]�� enforcing the promise will serve the best interests of justice.
����� Other Promises Enforceable Without Consideration:
Courts may also enforce, despite the lack of consideration,
[1]�� promises to pay a debt, otherwise barred by limitations, made after limitations have run, and, in rare cases,
[2]�� promises to charitable institutions.