Consideration: Common-Law Rules, Exceptions, and Comparative Approaches

All flashcards

Sufficient versus adequate consideration

Sufficient consideration has legal value; adequate consideration is economically proportionate to what is received.

Pre-existing duty

Promising only to perform an existing legal or contractual duty generally supplies no new consideration.

Nominal consideration

A token exchange, such as a peppercorn, may be legally sufficient, though a sham may be rejected.

Promissory estoppel

A doctrine that may prevent withdrawal of an assurance on which another party relied to their detriment.

Culpa in contrahendo

A doctrine in some legal systems addressing obligations arising during pre-contractual negotiations.

Quiz questions

1. Under the limited English-law route described for a past act to support a later promise, which condition must be met?Answer: The act was done at the promisor's request.
2. Under the Indian Contract Act, 1872, whose actions may provide consideration?Answer: The promisee or another person.
3. A producer pays for the exclusive right to decide within a year whether to make a film. What type of arrangement can this payment support?Answer: An option contract.
4. A party agrees to drop a genuine disputed claim in return for a guaranteed payment. What may support the settlement?Answer: The compromise of the disputed claim.