Contracts: Consideration

The statement allows the promisor to decide freely whether to purchase the item. Because it creates no definite obligation, it is illusory. The other choices describe actual promises or forbearance that may have legal significance.

Nora was not legally required to pay the debt until December 31. By paying early, she provided something different from her existing obligation. This early payment can therefore be new consideration supporting the bank’s promise to forgive the remaining balance.

Performing a pre-existing contractual duty normally does not provide new consideration. However, modern contract law may enforce a fair and equitable modification when performance becomes substantially more difficult because of circumstances the parties did not anticipate. The hidden structure may qualify as such an unforeseen difficulty.

Consideration need not be economically equal or adequate from an objective perspective. Courts ordinarily permit competent parties to decide the value of their own exchange. Therefore, the $50 can be legally sufficient even though the bicycle is worth considerably more.

The debt is unliquidated or disputed because the parties honestly disagree about the amount owed. Their mutual surrender of their respective positions supplies consideration: the mechanic gives up the claim to $3,000, and the customer agrees to pay more than the customer believes is owed.

Taking on an additional task represents a new legal detriment because the party was not already required to perform that task. It can therefore provide new consideration.

Foreseeable reliance alone is insufficient. The promise must actually cause the promisee to act or refrain from acting. Without actual reliance, there is generally no basis for applying promissory estoppel.

Moral consideration is based on a person’s belief that they ought to do something for ethical reasons. A moral obligation alone is generally not legally sufficient consideration, although the materials recognize limited circumstances involving the prevention of injustice.

Consideration is something of legal value that the parties bargain for and exchange. It is one of the primary reasons courts enforce contractual promises. Consideration does not necessarily have to be money; it may consist of an act, forbearance, modification of a legal relationship, or return promise.

The firm-offer rule covered here requires a merchant’s signed written offer involving the purchase or sale of goods. An oral offer to provide services lacks both the required writing and the required goods transaction.

Contracts involving real estate are generally governed by common law, not UCC Article 2. Under the traditional common-law rule, a material contract modification normally requires new consideration, unless a recognized exception applies.

The service was completed before the promise of payment was made. The later promise therefore did not induce the earlier service, so the service generally qualifies as past consideration rather than bargained-for consideration.

Promissory estoppel does not turn reliance into an ordinary bargained-for exchange. Instead, it provides an alternative reason to enforce a promise when the required reliance and injustice elements are satisfied.

Under the pre-existing duty rule, performing—or promising to perform—something that one is already legally obligated to do does not provide new consideration. The person has not undertaken a new legal detriment.

Promissory estoppel is a substitute for consideration based on foreseeable and actual reliance, together with the need to prevent injustice. Acts, forbearance, and return promises can themselves constitute traditional consideration.