Chapter 11 Mutual Consideration What is Consideration Promisor
- Slides: 7
Chapter 11 Mutual Consideration
What is Consideration? • Promisor - the person who gives the promise or action in exchange for the promise or action of another. • Promisee -the person to whom the promise or action is given in exchange for the other person’s promise or action • Consideration -what on gives and receives in a contract • Forbearance -refraining from doing what one has a right to do.
Why is Consideration Required? • Gift -the voluntary transfer of ownership of property without receiving consideration in return. • Seal -an impression on a document, a paper, or wax affixed to the document, or the word “Seal” or the letters “L. S. ”on the document indication that the parties intend to be legally bound.
What is Sufficient Consideration? • Nominal Consideration -a token amount (“consideration”) identified in a written contract when parties wither cannot or do not wish to state the amount precisely
Is an Existing Obligation Consideration? • Compromise if a disputed claim -mutual promises to refrain from bringing suit. • Composition of creditors -agreement of all creditors to accept a proportion of their claims as full payment.
Is past Performance Consideration? • Past Consideration -value given before a contract is made.
What are exceptions to the requirement of mutual consideration? • Promises of Financial Support to Charitable Organizations. • Promissory Estoppel – Promissory Estoppel -when a promise is enforced even though no consideration is given for it. • Commercial Paper • State Statutory exceptions
