Section D & E – Contracts – Professor Claus – Elizabeth Noakes – March 3, 2011 – Handout 5

This handout was prepared by the Learning Assistant for the class, not by the professor.

Please address any questions about the handout to the Learning Assistant during office
hours (Wed. 4:30-5:15 p.m. in LRC.)

These handouts are a review of the main points, and designed to help you keep on track.
These are not enough by themselves to prepare you for the final exam.

CONSIDERATION

1. Define consideration.

a. Anything that the sides are giving up in the contract. Its how you
distinguish contract from a gift where only one side is giving up
something, where theres consideration only one side.

i. If the promisee already had a legal duty to give up the

consideration, you cant use it as consideration.

2. Is a gratuitous promise the same thing as consideration? Explain.

a. No. Gratuitous promises are not legally enforceable. No rights to gifts

until they are actually handed over while considerations in contracts
have their rights attatched when the contract is formed even before
performance occurs.

3. If Douglas tells Kristine, “I promise to give you a new laptop for your
birthday,” and then fails to do so, can Kristine sue Douglas for breach of
contract?

a. No because it’s a gift not a contract.

4. Jennifer Lopez tells her roommate Marc Anthony that she will pay him $50 if
he signs up for the moot court competition. If Marc signs up for the moot
court competition, does Jennifer have to pay him $50?

a. Yes. Marc antony is giving up his right not to sign up for the moot court
competition.

i. Watch out for! – Just make sure that Marc Knows beforehand
that he is going to be paid 50 dollars to sign up for the moot
court competition.
5. Miley Cyrus promises to sell her childhood teddy bear to Taylor Swift for
$50,000. Taylor accepts. What is the consideration in this context?

a. The promised future action, miley’s detriment is that she will not have
the teddy bear in the future. Taylors detriment is the not having the
50k in the future. The detriment must induce the promise and the
promise must induce the detriment. So giving up the teddy bear and
giving up the 50k is the consideration.

6. What is the holding of Alaska Packers’ Ass’n v. Domenico? – BIG CASE

a. They had agreed to go on the boat then once they got up their the
crew held out for more money. They were already bound to go up
there though, so there was no consideration on their part in a contract
for more money. Second new contract not enforceable. They already
had an existing duty. Theres no consideration for the promise
of extra pay, the crew needed to agree to work something
more – anything more- for consideration.

7. How is the rule from Brian Construction and Development Co. v. Brighenti
different from the rule announced in Alaska Packers?

a. Where the unforeseen circumstances of a contract make it overly

burdensome, the payment can be increased without additional work.
The modification is valid because the new duty is different from the old
duty in the contract. In brian there is just a change in work
circumstances, in Alaska Packers there was just a change in amount of
payment demanded.

8. Can the agreement not to pursue a valid legal claim constitute valid
consideration?

a. It constitutes valid consideration if I do reasonably believe I will pursue

a lawsuit. Its based on your own subjective good faith belief, the other
party needs to have a good faith beilief as well, doesn’t matter if it is
actually valid. Dire v. National Byproducts

9. Can the emotional satisfaction you feel from giving a gift to a third party
constitute valid consideration?

a. Nope. In Newman v Snells and State bank v. - A womans promise to

pay off her husbands bank debt was not a contract. It was a gift
because there was no consideration on the part of the bank, the bank
was giving her a note worth nothing. No consideration on both sides,
no enforceable contract.

10.Party X and Y enter into a contract. Does valid consideration exist where:
a. Party X does not think he is getting anything from the contract—he
simply wants to make a gift to party Y?

i. No. Gratuitous promises are not enforceable.

b. Party X thinks he is getting something awesome from the contract, but

Party Y thinks that Party X is crazy because Party Y believes that
although the deal is good for Party Y it is horrible for Party X.

i. Yes. This is enforceable consideration.