1. Bellwork:
Read pages
Copy and define all vocabulary (highlighted) in section 8-1 (p 139) of the text
15 minutes:
Ask the students to review their lists and place a check by the promise(s) that they believe would be legally binding on the if the promisee persued them in court.

2. Consideration Chapter 8

3. 8-1 Types of Consideration
GOALS:
Identify the three requirements of consideration
Recognize the various forms of consideration

4. Hot Debate page 138 5 minutes:
Write two reasons for each position, followed by class discussion, look for well thought-out responses
1. Maureen should be able to recover the value of the rip because of basic fairness. The trip was promised to her, and that promise was broken.
Also, Maureen may have passed up other opportunities because the trip was already on schedule; such reliance, if reasonably anticipatable, may legally bind the aunt to her promise.
2. The aunt should not have to oay for the trip because she simply made a promise to make a gift. This was not a binding contract.
Also, this trip would have been a luxury for Maureen. The aunt would not be harming Maureen by decling to give her a luxury item.
page 138

5. Focus:
List five promises you have recently made. Beside each promise list what you have received in return.
Your list may include all forms of promises from calling a friend to promises to perform work
Ask the students to review their lists and place a check next to the promises that they believe would be legally binding if the promisee persued the iddue in court.

6. WHAT'S YOUR VERDICT?
one student should read, and another should answer the question
(Yes, after the neighbor complies by performing, the contract is enforceable by both parties. Prior to the initiation of performance, neither party was bound. The consideration binding John to his promise to pay $100 is the perfomrance of Jordan. The consiideration binding Jordan to perform, after the performance is initiated, is the promise by John to pay him $100 to do so.),     
p 139

7. Think Critically Through Visuals
After performance by the offerree is initiated as a result of unilateral contract offer, there at two promisors and two promisees.  The father is bound to his promise.  The child is concurerently bound, implied, toi a promies to adequately clean the room so as to hold the faterh to his promise. 
picture, page 140

8. Consideration
Consideration – is what a person legally demands and generally must receive in order to make her or his promise legally binding.

9. The three requirements of considerations.
Each party must give an act, forbearance, or promise to the other party.
Each party must trace what they contribute to the transaction (act, forbearance, or promise) for the other party’s contribution.
What each party trades must have legal value, that is, it must be worth something in the eyes of the law.
Emphasize the vital purpose of consideration as a distringuising factor between an unenforecable promise (typically to transfer something to another of tangible or intangible worth without receivinb anything in return) and legally enfoceable promises
Note: The forbearance mentioned in the first requitrement entails not exercising a right to which one is legitimately entitled.

10. Possible Types of Consideration
a promise
an act other than a promise
forbearance
a change in a legal relation of the parties
money
other property

11. Consideration is what distinguishes a contractual promise from a promise to make a gift.

12. Gift
A gift is a transfer of ownership without receiving anything in return.
A promise to make a gift is generally not legally enforceable.
Only after the donor (the person giving the gift) intentionally gives it to the donee (the person getting the gift, and the donee accepts the gift does the transaction become legally binding.

13. Forebearance
Forbearance – the promise not to do something.

14. Trading
In most cases a contract is made when one party exchanges a promise for the promise of the party on the other side. (Consideration must be mutual)‏
Promisor - the person promising an act or forbearance
Promisee – the person to who the promise is made.

15. I'll gladly pay you Tuesday for a hamburger today.

16. Legal Value
Legal value – means there has been a change in a party’s legal position as a result of the contract.
Consideration given and received by the promiser and the promisee must have legal value but need not be equal in value.
What is important is that the parties to the contract consider them reasonably equlvalent given each parties' needs and perspective at the itime of contracting.
The courts will not interveene in this most basic level gaining making. In fact, they are prevented from doing so by the US Constitution's prohibition of government's passing any law "impairing the obligation of contracts."
The concept of legal value is very broad. A person's "legal position" that, when changed, constitutes legal value, is composed of a wide variety of rights, freedoms, and priveledges in property. person, future alternatives, and the like.

17. Adequacy of Consideration
Generally consideration need not be of equal economic value.
Economic value is unimportant as long as there is genuine agreement.
Although courts generally do not refuse to enforce a contract due to a perceived adequacy of consideration, if the difference in economic value is extreme it may indicate tht the assent of the party receiving what is apprently inadequate consideration has been coerced into the agreement. As a consequence, the apgreement may be deemed unenforceable because of the lack of genuine assent.  

18. Think Critically Through Visuals
picture, p 141
Scarcity in the face of need has always led to an increase in value.  In countries where planned economies scarcity leads to the formation of black markets that traffic in the needed googs to be sold at the highest price "that the market can bear."

19. In your groups, identify three variables that could be used to determine adequate consideration, or what acceptable consideration to the parties is.
answers: personal needs and desires, market supply and demand, and a party's ability to evaluate

20. Adequacy of Consideration
Discuss in your groups a time when the consideration you received was not of equal value to the service, money, or product you provided.

21. Unconscionable
Sometimes when there is evidence of a mutual mistake, fraud, duress, or undue influence the consideration received by one party is grossly inadequate compared to the consideration received by the other party.
In a case where consideration is one sided the consideration may be declared unconscionable (grossly unfair or oppressive).

22. Nominal Consideration
Nominal consideration – is a token amount of consideration.
For instance you sell a car to a friend to help him or her out at $1.00.

23. 8-2 Questionable Consideration
GOALS
Describe situations in which consideration is present only under limited circumstances.
Recognize when what appears to be binding consideration is not.
11/30/2008

24. Circumstantial Consideration
Certain forms of consideration are only legally biding in the proper circumstances.
If these circumstances, in the form of properly worded contract provisions or pattern of behavior are not present, what would appear to be valid consideration is not.

25. Illusory Promises
Illusory Promise – when a contract contains a clause that allows you to escape the legal obligation, the promise is said to be illusory.

26. Termination Clauses
These are clauses that businesses add into contracts in case business circumstances change.

27. Output Contract
When buyers agree to buy all of a particular producer’s production.

28. Requirements Contract
When a seller agrees to meet all of the needs of a particular buyer.

29. What's Your Verdict? Page 143
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30. Existing Duty
A person promises to do something that he or she is already obligated to do by law or by prior contract. Such a promise, or act, cannot serve as a consideration to bind the other party to the contract.

31. Existing Public Duty
By doing you public duty you cannot use that act as a promise to enter into a contract.

32. Existing Private Duty
By doing something that is already your private duty, or obligation, you cannot use the promise of the act to enter into a contract.

33. Statement of Liquidated Debts
A liquidated debt is one where the parties agree that the debt exists and on the amount of the debt.
When a creditor agrees to and releases a debtor from part or all of the debt that portion is said to be liquidated.

34. Settlement of Unliquidated Debts
When there is a dispute between the two parties as to the amount owed, the difference in the debt is referred to as unliquidated.

35. Accord and Satisfaction
When the creditor agrees to receive less than full amount owed by the debtor this process is known as accord and satisfaction.
Accord – The new agreed upon amount of debt.
Satisfaction – The newly agreed upon amount of debt when it is paid by the creditor.

36. What do you think?
Ryan owed a friend Darren, $900 for an unpaid debt. The amount owed was undisputed. One day, Darren saw Ryan on the street and asked him for the money. Ryan responded, “I don't have $900, but I'll pay you $500, take it or leave it? Darren agreed to the lesser amount. Can Darren sue Ryan for the unpaid $400?
Because Darren paid no consideration for Darren’s agreement to take less than the amount owed the promise is unenforceable.

37. Release
A Release is an acceptance of consideration in exchange for a promise not to sue in a case where damages have not yet been determined, aka the damages are unliquidated.
Releases are usually used in a tort case where one party has suffered damages at the hands of another.

38. In This Case: Page 145 What would Grant be able to sue for?
Who would Grant be able to sue?
What would the courts look at in this case?
Do you think Grant will be successful in suing the lawnmower company? Why or why not?
Individual In-Class activity.

39. XYZ Pharmaceuticals
XYZ Pharmaceuticals contracts with Dyno Labs in Burma to manufacture Goo Great baby formula, which XYZ Pharmaceuticals plans to sell and distribute under their own label in Burma. What type of contract has XYZ Pharmaceuticals and Dyno Labs entered into?

40. Composition of Creditors
When creditors cooperate and agree to accept less from a debtor then they are entitled to in exchange for the debtor agreeing not to file bankruptcy.

41. Checkpoint
 Page 145
The promise is not binding because as stated it is in its essence a sham.  The promise is better characterized as more of an observation paraphrases by, "I will if I want to".

42. What do you think?
Comment in a papragrah of at least three sentences on the following:
"Accepting partial payment of a debt as payment in full may be better than going to court to get the full amount due."

43. What’s Your Verdict: Page 145
Francis' service of changing the tire is not consideration for the promise of $20 due to the fact it is a past performance.

44. Whould you expect to be paid for giving aid?
What do you think?
Whould you expect to be paid for giving aid?
It is pro forma in such situations for the reciprient of such aid, after being provided such assitance, to offer a stipend but this is typically refused. 

45. False Consideration
Certain acts and promises are falsely identified as consideration by can never be consideration.
There are so called "Good Samaritan" statues on the books of most states that require trained medical personell to stop and help those in need of medical attention upon penalty of fine or imprisonment.  These statues also contain protection for such good samaritans from subsequent suit for giving improper care.  Similar provisions also provide protection from suit for those who provide transportation to the stranded and individuals donating "apparently wholesome" food to feed the needy. 

46. Mutual Gifts
When something of value is given by one party to another without demanding anything in return, the something of value is not consideration for anything later promised or provided.

47. Past Performance
An act that has already taken place cannot serve as consideration, such an act is called past performance.

48. Exceptions to the Requirement of Consideration
There are exceptions to the rule that consideration is necessary to bind someone to their promise.
11/30/2008

49. A Question of Ethics Page 146

50. Checkpoint
Page 146
Only a completed gift "shown by intent, delivery, and acceptance of the subject matter" is legally enforceable.  A stated intent to make a gift, standing alone, is not enforceable.  A valid contract, however, is enforceable with only mutually suportable promises in evidence. 

51. 8-3 When Consideration Is Not Required
GOALS:
Distinguish situations where consideration is not needed.
Recognize when the doctrine of promisory estoppel can be applied.

52. Why are acceptions to the doctrine of consideration needed?
What do you think?
Why are acceptions to the doctrine of consideration needed?
Ask students to provide examples where enforcing the requirement of consderation may work against socital goals.  "These situations include: charites not being able to collect on their pledges as there is no consideration for them; businesses who need to place or receive orders that can be acted on with assurace they will be paid for; courts having to adjudicate matters that should have been brought in a more timely fashion where evidence has dissapeared and witnesses have forgotten what they saw."

53. What's Your Verdict? Page 147
As it would be unjust to deprive the hospital of the promised support it reasonably relied on, the Constantine children are legally obligated to make good on their pledge. 

54. Promises to Charitable Organizations
Courts generally enforce promises for charitable giving provided:
The charity states a specific use for the money.
The charity actually relies on the pledge.
11/30/2008

55. Think Critically Through Visuals
Yes. The courts generally will enforce such pledges if the charity solicited them for a specific use and has acted in reliance on the availablity of the funds.
Picture on, p 147

56. Promises Covered by the UCC (Uniform Commercial Code)‏
Firm Offers
Modifications

57. Firm Offers
A merchant who makes an offer in a signed writing to buy or sell goods or promises to leave the offer own bound for up to three months even when no payment or other consideration have been given for the promise.

58. Modifications
A good-faith agreement that modifies an existing contract for the sale of goods needs no new consideration.
Discuss with the students how the UCC rules for firm offers and contract modifications support business activity by streamlining the old common law rules relating to consideration. 
11/30/2008

59. Quick Activity
Draft a written firm offer to buy a large lot of goods from a local retailer. 
To be completed in groups of two.  Use a few randomly selected presentations. 

60. Promises Barred from Collection by Statue
Certain statues may prevent you from collecting on a promise.
11/30/2008

61. Statue of Limitations
Statue of limitations are set by the state and specifies a time limit from brining a lawsuit.
In many states (not all) for a tort the state of limitations is three (3) years.
In Pennsylvania in most cases it is two (2) years.
In many states the statue of limitations for breach of contract or torts is three years. 
11/30/2008

62. Debts Discharged by Bankruptcy
Sometimes even after a debt has been discharged as a result of the debtor declaring bankruptcy, the obligation may be reinstated by a promise of the debtor.
This is most often done when someone close the debtor cosigns or guarantees payment on the debt.
11/30/2008

63. Law Brief  
Page 148
Reaffirmations of debt may occur outside of bankrupcy procedure.  For example: If you are sued by a creditor but settle for less than the full amount due, a promise, made after the entry of judgement resolving that debt, saying that you want to pay the rest of it to the creditor, will be legally binding even though you received no consideration for the promise.  Example: 3rd and Lombard. 

64. Promissory Estoppel
Promissory estoppel prevents promissors from stating in court that they did not receive consideration for their promise.
Promissory estoppel is used to prevent an injustice in the legal system.
11/30/2008

65. Conditions for Promissory Estoppel
The promisor should reasonably foresee that the promissee will rely on the promise.
The promissee does, in fact, act in reliance on the promise.
The promisee would suffer a substantial economic loss if the promise is not enforced.
Injustice can be avoided only by enforcement of the promise.
11/30/2008

66. Checkpoint
Page 148
The four mentioned in this lesson are promises to charitable organizations, promises covered by the UCC (firm offers and contract modifications), promises barred by statue (discharge bankrupcy debts and statues of limitations), and promises made enforceable by the doctrine of promissory estopple.   

67. Closing Activity
Make a pledge card for a funraising events sponsored by school groups. 
The cards should include:
The name of the organization.
What the funds will be used for.
Spaces for the amount of the pledge.
How and will the pledge will be paid.
The signature of the would-be doner.

68. Computer Activities Activity #1 Find and compare the polices of three
organizations or institutions as to the collection of
pledges. 
Activity #2
Use the computer to research and answer the following questions.
What is Chapter 7 Bankruptcy?
What is Chapter 11 Bankruptcy?
What is Chapter 13 Bankruptcy?
If you were a creditor what chances do you think you would have in receiving repayment in each of the above types of Bankruptcy?
Activity #3
Create two comic strips illustrating a payment
problem and how its settlement involved either an
accord and satisfaction of other means of
resolution.