Contracts: Consideration

Alex’s promise induces Jordan’s promise, and Jordan’s promise induces Alex’s promise. That reciprocal relationship creates a bargained-for exchange supported by return promises.

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.

A modification of an executory contract may be recognized when it is fair and equitable. This is a limited qualification to the ordinary pre-existing duty principle and should not be confused with an unsupported demand for additional compensation.

Valid consideration generally requires legal sufficiency and a bargained-for exchange. Legal sufficiency means that the consideration involves a legal benefit or legal detriment. A bargained-for exchange means that each party’s promise or performance induces the other party’s promise or performance.

UCC Article 2 governs transactions involving goods. Therefore, the firm-offer rule applies to a qualifying merchant’s offer to buy or sell goods, not to a transaction involving only services or real estate.

This is a bilateral contract, in which one promise is exchanged for another promise. Lena promises to design the website, while Omar promises to pay for that work. Each party assumes a legal obligation, so each return promise can provide consideration for the other.

The merchant’s offer must be contained in a signed writing. The writing must provide assurance that the offer will be held open.

The special firm-offer rule applies to an offer made by a merchant. This merchant requirement distinguishes a UCC firm offer from an ordinary promise to keep an offer open.

The central UCC requirement identified in the materials is good faith. A modification should be honest and commercially legitimate, rather than an improper attempt to force new terms on the other party.

Cashing a check clearly offered as full settlement of a genuinely disputed debt may be treated as acceptance of the debtor’s settlement offer. To avoid unintentionally creating an accord and satisfaction, the safest general response is to return the check without cashing or depositing it.

When there is an honest dispute concerning the existence or amount of a debt, resolving that dispute through an agreed payment may provide legally sufficient consideration. Each party gives up the right to continue asserting its full original position.

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.

A bargained-for exchange requires the promise to induce the act or detriment. If the act was already completed, a later promise could not have induced it. Therefore, the required exchange is ordinarily missing.

These doctrines provide alternative legal grounds for enforcing a promise or imposing an obligation when the ordinary requirements of consideration are absent. Promissory estoppel focuses on reliance, quasi-contract focuses on unjust enrichment, and public policy focuses on broader policy objectives.

The accord is the new agreement to settle the disputed claim for $6,000. The satisfaction is the client’s performance of that agreement by paying the $6,000. Together, these create an accord and satisfaction that ordinarily discharges the original disputed claim.