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1 George Mason School of Law Contracts I Consideration F.H. Buckley

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1 1 George Mason School of Law Contracts I Consideration F.H. Buckley fbuckley@gmu.edu

2 The need for a consideration  Restatement § 17(1) Agreement and Bargain: § 3 Definition § 71 2

3 The need for a consideration  How is consideration defined in Hamer v. Sidway? 3

4 Hamer v. Sidway 4 The nephew was going to the dogs…

5 Hamer v. Sidway 5  What is the benefit-detriment standard? Do we have to ask whether it was a real detriment? Or whether it was a benefit to the uncle?

6 Hamer v. Sidway 6  What is the benefit-detriment standard? Can you suggest why the uncle might have intended that the promise be legally enforceable?

7 Hamer v. Sidway 7  What is the benefit-detriment standard? Can you suggest why the uncle might have intended that the promise be legally enforceable?  Animus contrahendi: Restatement § 21

8 Kirksey  Why did Isaac invite Antillico to Talladega county? 8

9 Kirksey  Why did Isaac invite Antillico to Talladega county? Was there a benefit to Isaac? A detriment to Antillico? 9

10 Kirksey  Why did Isaac invite Antillico to Talladega county? Was there a benefit to Isaac? A detriment to Antillico? Williston’s tramp? 10

11 Kirksey  Why did Isaac invite Antillico to Talladega county?  Do you think Isaac intended legal liability? And is that determinative? 11

12 St. Peter v. Pioneer  Why didn’t the theatre restrict bank night to paying patrons? 12

13 St. Peter v. Pioneer  Why didn’t the theatre restrict bank night to paying patrons?  So was there a contract with non- paying people waiting outside? 13

14 St. Peter v. Pioneer  Why didn’t the theatre restrict bank night to paying patrons?  So was there a contract with non- paying people waiting outside?  How was the Π to accept? 14

15 St. Peter v. Pioneer  Why didn’t the theatre restrict bank night to paying patrons?  Can you articulate why the theatre might have wanted the promise to be binding? Recall Lefkowitz 15

16 The Bargain Theory Restatement § 72  How would you define it? Is it broader or narrower than the benefit/detriment theory? 16

17 The Bargain Theory Restatement § 72  How would you define it? You and I want to see a date for lunch but quarrel over the date. Is this bargaining? 17

18 The Bargain Theory Restatement § 72  How would you define it? You and I want to see a date for lunch but quarrel over the date. Is this bargaining?  Was Kirksey a bargain situation? What about Hamer v. Sidway? 18

19 The Bargain Theory Restatement § 72  How would you define it? Spiedel at 134 on the move to a capitalist economy 19

20 The Bargain Theory Restatement § 72  So what’s the point of the bargain theory? Is it ideological-a subsidy for capitalism? Or is something else going on? 20

21 What if there’s no bargain: Gratuitous Promises  Uncle Ebenezer might want to bind himself? So how does he do so? At common law, a gift is effective if:  Donative intent (animus donandi)  Delivery by donor  Acceptance by donee 21

22 What if there’s no bargain: Gratuitous Promises  Uncle Ebenezer might want to bind himself? So how does he do so? What constitutes delivery by donor?  Actual delivery of gift  Constructive delivery (e.g. key to car or house)  Deed of gift 22

23 The seal 23

24 The seal 24  Definition: Restatement § 96  Effect of seal: Restatement § 95(1)

25 What’s wrong with formalism? 25 Spodese mihi dare? Spondeo!

26 Lon Fuller on Consideration  The evidentiary function  Evidence that a promise exists 26

27 Lon Fuller on Consideration  The evidentiary function  Evidence that a promise exists  The deterrent function a check against rash promises 27

28 Lon Fuller on Consideration Remember the Statute of Frauds?  The evidentiary function  Evidence that a promise exists  The deterrent function a check against rash promises  The channeling function “channels for the legally effective expression of intention” 28

29 Lon Fuller on Consideration  Does all this simply come down to the intention to be legally bound? 29 Is that all there is?

30 Lon Fuller on Consideration  Does this all come down to the intention to be legally bound?  If so, what does this tell you about the standard for adequacy of consideration? 30 A peppercorn

31 Wolford v. Powers 142  What was the consideration from the Wolfords? 31

32 Wolford v. Powers  What was the consideration from the Wolfords? Adequacy irrelevant: Restatement § 79 32

33 Wolford v. Powers  What was the consideration from the Wolfords? What was the relevance of the subsequent care provided to Lehman 33

34 Wolford v. Powers  What was the consideration from the Wolfords? What was the relevance of the subsequent care provided to Lehman  The past consideration doctrine How would you apply Restatement § 86 in Wofford? 34

35 Performance of Prior Legal Obligation  A reward is offered for apprehension of a thief. Policeman catches thief in performance of his duties. Is there consideration? 35

36 Performance of Prior Legal Obligation  A reward is offered for apprehension of a thief. Policeman catches thief in performance of his duties. Restatement § 73 36

37 Performance of Prior Legal Obligation  A reward is offered for apprehension of a thief. Policeman catches thief in performance of his duties. Why is this a sensible policy? 37

38 Performance of Prior Legal Obligation  A reward is offered for apprehension of a thief. Policeman catches thief in performance of his duties. 38

39 Performance of Prior Legal Obligation  A reward is offered for apprehension of a thief. Policeman catches thief in performance of his duties. What do you think of the proviso at the end? 39

40 Performance of Prior Legal Obligation  Compromise with creditors? 40

41 Performance of Prior Legal Obligation  Compromise with creditors? Restatement § 73, illustration 6 41

42 Does the promisee’s motive matter?  Williams v. Carwardine (p. 147) The status of dying declarations  Timor mortis conturbat me 42

43 Does the promisee’s motive matter?  Williams v. Carwardine (p. 147) Restatement § 81  And if this weren’t the case? 43

44 Re Greene Where was the consideration? 44

45 Re Greene Where was the consideration?  What about the sexual services? As future services, were these tainted by the doctrine of illegality 45

46 Re Greene Where was the consideration?  What about the sexual services? If future services these would be tainted by the doctrine of illegality  Is this simply the expression of a time-worn archaic morality? 46

47 Re Greene Where was the consideration?  What about the sexual services? If future services these would be tainted by the doctrine of illegality  Is this simply the expression of a time-worn archaic morality? What’s the difference between a contract for ex ante services and palimony for past services? 47

48 Re Greene Where was the consideration?  What about the sexual services? If future services these would be tainted by the doctrine of illegality  Is this simply the expression of a time-worn archaic morality? Is there something else going on? 48

49 Re Greene: Adequacy  “for one dollar and other good and valuable consideration” Why didn’t that work? 49

50 Re Greene  “for one dollar and other good and valuable consideration” Why didn’t that work? What if they had added “the receipt and adequacy thereof is hereby acknowledged” And provided a cheque for that amount? 50

51 Re Greene  What about the fact that the contract was under seal? 51

52 Schnell v. Nell (p. 146)  A promise of $600 to honor wife’s promise in will consideration of: Promise in will one cent love and affection for deceased wife 52

53 Schnell v. Nell (p. 146)  A promise of $600 to honor wife’s promise in will consideration of: Promise in will one cent love and affection for deceased wife  What about the moral obligation to honor his wife’s wishes? Causa vs. consideration 53

54 Batsakis  Why did they structure the contract as a loan of $2,000 at 8 per cent? 54 Athens, April 27 1942

55 Batsakis 139  Why did they structure the contract as a loan of $2,000 at 8 per cent? Is there really a problem of adequacy here? 55

56 Mutuality of Obligation  Either both are bound or neither is bound Sed qu. unilateral contracts See Restatement § 79: not a separate requirement 56

57 57 George Mason School of Law Contracts I Promissory Estoppel F.H. Buckley fbuckley@gmu.edu


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