2. Elements of a Contract Offer Acceptance Genuine Agreement Consideration Capacity Legality

3. Consideration Consideration is the exchange of benefits and detriments by the parties to an agreement. Benefits – something that a party was not previously entitled to Detriments – Any loss suffered

4. Void or Voidable Certain agreements lack consideration and consequently are unenforceable: Gifts Promise to obey the law Fulfill another preexisting duty

5. Gifts A gift is something that is given freely, not providing consideration. Once given, a gift has the status of an executed contract. The promise of a gift is not enforceable.

6. Promise to Obey the Law Since everyone is obligated to obey the law, a promise to do so is not detriment.

7. Preexisting Duty If a person is already under legal duty to do something, a promise to do that same thing does not furnish consideration. Ex: a police man asking for a reward for catching a criminal

8. Past Consideration Giving or exchanging benefits by the parties must take place when the contract is made. If consideration took place in the past or is given for something that has already been done, the courts will not regard that consideration as legal. The courts will not enforce any contract based on past consideration.

9. Illusory Promise Illusory – has false appearance Some contracts are illusory; at first glance they appear to bind both parties. Under further examination, it is clear that they do not. Ex: One person agrees to buy all of the apples that they purchase from Erin’s Apple Farm over a the next year. Neither knows how much, if any will be purchased.

10. Adequacy Courts do not usually look at whether the contract is fair to both parties or not. Occasionally a court may refuse to enforce a contract or a portion of it if the court finds the contract unconscionable. Unconscionable – The contract is so one- sided that it unfairly oppresses one party and unreasonably favors the other party.

11. Promises Enforceable With Out Consideration Some promises are enforceable without consideration if the promise influences the behavior of another. If they are not enforced, those relying on them may suffer damages. This is called promissory estoppel. Ex: Pledges and Subscriptions

12. By: Aly Matuck Annie Shelton Mikey Frost