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

Six Questions Definition: Benefit-Detriment and Bargain Theory Family Promises The Effect of a Seal Adequacy of Consideration and Nominal Consideration Past consideration rule Relevance of Motive

The need for a consideration Requirement of a Bargain § 17(1), 71 Agreement and Bargain: § 3

The need for a consideration What was the consideration in Hamer v. Sidway at p. 42?

The need for a consideration What was the consideration in Hamer v. Sidway at p. 42? The nephew was going to the dogs…

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

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

Kirksey p. 128 Why did Isaac invite Antillico to Talladega? It wasn’t to see the speedway…

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

Kirksey Why did Isaac invite Antillico to Talladega county? Was there a benefit to Isaac? A detriment to Antillico? Williston’s tramp at p. 130?

Family Promises Do you think Isaac intended legal liability? The problem of family promises

St. Peter v. Pioneer p. 43 Why didn’t the theatre restrict bank night to paying patrons?

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?

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? Unilateral vs bilateral

St. Peter v. Pioneer “The requested acts were bargained for” Restatement § 72 Can you articulate why the theatre might have wanted the promise to be binding? Recall Lefkowitz

The Bargain Theory Was Kirksey a bargain situation? What about Hamer v. Sidway? Spiedel at 134 on the move to a capitalist economy Is something else going on with family promises?

The Bargain Theory How would you define it? You and I want to set a date for lunch but quarrel over the date. Is this bargaining?

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, and Acceptance by donee

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

What if there’s no bargain: Gratuitous Promises But what if he doesn’t have anything to give at that point and can only promise to give in the future?

The seal

The seal Definition: Restatement § 96 Effect of seal: Restatement § 95(1) Statutory abolition?

The Adequacy of Consideration Wolford v. Powers 141 Could a court measure the difference in values?

Wolford v. Powers What was the consideration from the Wolfords? “be it ever so small”: Restatement § 79 A peppercorn

Lon Fuller on Consideration p. 135 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”

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

Re Greene p.130 What was the consideration? What do you think was going on here?

Re Greene What was the consideration? “for one dollar and other good and valuable consideration” Nominal consideration vs. Adequate consideration What if they had added “the receipt and adequacy thereof is hereby acknowledged”

Re Greene Where was the consideration? What about the seal?

Nominal Consideration Suppose I promise to give you $1,000 in return for $1? Schnell v. Nell (p. 146)

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

Batsakis p.139 Is this a case of nominal consideration?

Batsakis p.139 What happened three weeks later Athens, April 27 1942

Batsakis p.139 Why did they structure the April 2 loan of $25 as a loan of $2,000 at 8 per cent? Is this a case of nominal consideration? Recall Aquinas’ Starving City

The Past Consideration Rule Restatement § 86 Note that there was past consideration in Wolford

Past Consideration A reward is offered for apprehension of a thief. Policeman catches thief in performance of his duties. Is there consideration?

Past Consideration A reward is offered for apprehension of a thief. Policeman catches thief in performance of his duties. Restatement § 73, illustrations 1 and 2

Past Consideration A reward is offered for apprehension of a thief. Policeman catches thief in performance of his duties. Why is this a sensible policy?

What’s wrong with a public official charging for services? I don’t get it…

Performance of Prior Legal Obligation Compromise with creditors? Restatement § 73, illustrations 5 and 6

Does the offeree’s motive matter? Williams v. Carwardine (p. 147) “believing that she has not long to live, she makes this voluntary statement to ease her conscience, and in hopes of forgiveness hereafter” Restatement § 81(1)

Mutuality of Obligation Either both are bound or neither is bound Restatement § 79: not a separate requirement Inapplicable in unilateral contracts