I. Consideration II. Want of Consideration III. Promissory estoppel

Pre-existing duties (1) Example Ex: Suppose that individuals enrolled in PMBR bar review course were to approach the lecturer and say: Dan, I offer you $100 if you promise to show up tomorrow and give a second set of PMBR lectures. Your promise is not binding. Lecturer did not give a firm promise. Did I promise to do an act that but for the bargain with you, I was not legally obligated to perform? Under an agreement between instructor & PMBR for giving 3 3-hour sessions of contract law, the student is the intended 3rd party beneficiary. Promise has no legal detriment, b/c just spoke of pre-existing obligation.

2. Getting around pre-existing duties If I were to exchange tenor or pre-existing duty, by promising that I’d show up 30-second early than the time called for under the K called for by PMBR or stay 15-seconds longer, any alteration in the tenor…is to overcome defense of want of consideration. If B promises to do K duty as long as A pays additional $5,000 to get architectural plans and specifications A needs – as A demands, B cannot enforce it b/c want of consideration. But, if any alteration in the tenor of B’s duty, the defense want of consideration is overcome.

3. Equity of rescission If B ran into problems that cast upon B burdens to performance, B might have an equity of rescission. If B asks for $5,000 more and tough it out and perform even though B has problems with performance, B cannot invoke the equity of rescission.

4. Common law doctrine of accord and satisfaction Raise a dispute with A over whether or not she was bound to perform. If B raised that dispute in good faith, then that dispute was a candidate of self-help remedy: accord and satisfaction.

Accord  agreement between A and B resolving their dispute. A can say: I’m not admitting that you’re able to claim a privilege to claim a bargain, but I need your help, I’m willing to pay you $5,000. If B says I don’t believe that I have any obligation to you at all and I think you should pay me $10,000 more, if there’s an element of compromise between the positions and the accord and they carry out terms of accord, payment of the money, performance of duties, etc., is called satisfaction. And B could never litigate as to whether A was entitled to the money.

5. Good faith modification (UCC): (1) Code is interested in reason why B will not perform. If B tells A in good faith she’s not willing to perform unless A pays her $5,000 more so, A is not obligated to make the payment or the promise: he can say, I’ll see you in court. But, if A promises to pay, the promise is binding.

(2) Code abolishes need for dispute between A and B, equity of rescission supporting B’s demand, and any element of valuable consideration supporting B’s concession. Modification of terms binding upon A the moment she consents.

(3) Good faith: Morals of marketplace: if other merchants in some market or calling would recognize there is moral legitimacy in seeking the modification, then the modification is being asserted in good faith. The UCC would not work between sale of architect and builder b/c this is sale of services, not goods. But if goods, ask: good faith modification of the K? If subject matter is services or some other subject matter falling outside the UCC, look to these 3 common law solutions to overcome defense of want of consideration.

III. Promissory estoppel Alternative to a contractual analysis – separate civil law claim for breach of promise. Suppose we cannot find legal detriment on the part of the traders and we cannot imply it and subsequent conduct does not cure the want of consideration. Then, there is no contractual relationship, but we then look to the third aspect of developing this issue b/c there may be liability for breach of promise given in a fact pattern – on a theory of promissory estoppel.

4. If P brings cause of action on this theory, it is not a contract claim. 5. The individual was worse off after the promise was made to him (i.e., literally impoverished). 6. Contrasted with restitution and quasi-contract, to recover on promissory estoppel, it is not essential to show that there has been unjust enrichment. 7. Protects reliance interest of aggrieved party. 8. First, we must locate in the fact pattern a promise to one of the parties made to another. That promise must have had the foreseeable quality of inducing reliance on the party to whom the promise was made.

9. The promise must have in fact occasioned reliance in the party of the promisee – actions taken by the promise or actions forebeared. 10. Breach of promise by promisee. 11. Promisee is now aggrieved and now worse off. 12. If all 4 elements are met, Sec. 90 of the Restatement – breaching promisor is bound to terms of promise at least to point necessary to allow aggrieved party to recoup his reliance interest. 13. Use doctrine of promissory estoppel to remedy promises that were gratuitous in nature, half-completed gifts. Recent case law - -extension of promissory estoppel into the case law. ->EX Franchise world.

Example You acquired a masterpiece for $500. It’s worth millions. I spot the Colonel Sanders. I tell him my tale of tragedy. Colonel promises that he will grant me a franchise in Barstow, CA to market his KFC chicken. Colonel has made a promise. IN reliance of the promise, I undertake at my own expense a course in chickenology at Foul University to learn to prepare the KFC Chicken. Wife and I have invested all funds we could for the KFC franchise business. I convert my spouse and children in people that won’t eat anything other than chicken. In wake of all of this reliance, Colonel chances his mind and breaches the promise.

Q & A Money damages against Colonel? No, no contract. No offer. Therefore, element of bargain is missing. Therefore, no contractual relationship. But, Colonel did make a promise. I am also worse off today than before I met him. Can the law do anything for me?

Promissory estoppel. I must establish the Colonel is guilty of a promise – with foreseeable consequence of inducing reliance on part of promisee. Next element is to show I changed position in detrimental reliance on Colonel’s promise. I must establish breach of the promise (very clear). I must seek recovery of damages to put me back in the position I was in on the day the Colonel made the promise.

Result: I will get some relief, but not everything Result: I will get some relief, but not everything. Would a reasonable person have seen that there would be detrimental reliance – taking steps to learn to prepare the food? Yes. Steps were reasonable – within the ambit. I will recover tuition to Foul University. Any expenses of leaving my home and taking up residence there will be taken up as damages. Diminished family fortune for chicken palace in Barstow – foreseeable to reasonable person? Certainly some construction is required – we’d be prepared to shift incidence of cost to Colonel… Other claim: $75,000 psychiatric claim for me and my loved ones. Was this reasonably foreseeable? No. I would recover nothing on that aspect of my claim.

14. Promissory estoppel – can quiet title in promise – for specific performance. No reliable way to measure an award. 15. If there is no legal detriment on one side and therefore could not be a contractual relationship, yet a promise given, promise breached and the promisee is worse off, then do an analysis of a potential recovery of promissory estoppel