Contracts: Consideration

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.

A quasi-contract, also called a contract implied in law, may be imposed to prevent unjust enrichment. Because Kai received necessary services while unable to agree to them, the law may require Kai to pay their reasonable value even though the parties did not form an express contract.

Courts generally examine the legal sufficiency of consideration, not whether each party received an economically equal bargain. The $300 is something of legal value exchanged for the painting. A significant difference in value does not, by itself, make the agreement unenforceable.

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.

Promissory estoppel is an equitable doctrine intended to prevent unfairness. Therefore, the promise is enforced only when enforcement is needed to avoid injustice.

The ordinary pre-existing duty rule can create a consideration problem when a party merely promises to perform an existing duty. Under UCC Article 2, however, a good-faith modification to a sale-of-goods contract does not require new 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.

Promissory estoppel can make a promise enforceable despite the lack of traditional consideration. It applies when the promisor should reasonably expect the promise to induce action or forbearance, the promise actually does so, and enforcement is necessary to prevent injustice.

A signed or written new promise to pay a debt barred by the statute of limitations is a recognized exception to the ordinary consideration requirement. Although the creditor’s original judicial remedy was time-barred, the debtor’s qualifying new promise may revive the obligation.

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.

A waiver of an existing breach generally does not require new consideration. The landlord may voluntarily choose not to enforce the remedy arising from that particular breach. This is different from an attempted modification of future contractual duties, which may require consideration under common law.

Promissory estoppel, quasi-contract, and public policy may support enforcement even without an ordinary bargained-for exchange. The items in option B are forms of consideration rather than substitutes.

Under UCC Article 2, an agreement modifying a contract for the sale of goods does not depend on new consideration in the traditional way. The modification must instead be made in good faith.

A gift is given voluntarily without requiring something in exchange. Because consideration depends on a bargained-for exchange, a simple promise to make a gift ordinarily lacks consideration.

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.