1. Consideration - General
Contract Formation
Consideration - General
What is it? A bargained-for exchange or quid pro quo (in a way, acts as proof of contractual intent).
Is it legally sufficient? A thing, a return performance, a return promise, a forbearance of a legal right?
If perhaps not legally sufficient, e.g. huge disparity in values on each side of the exchange, then courts will check into adequacy. May be genuine, may be fake (tax avoidance, really a gift not a contract, bribe, etc.).
Sometimes parties “fake” a contract for whatever reason. The legal sufficiency is questionable, so then and only then a court will take a deeper look into adequacy.)
U.C.C. Art. 2 output and requirements contacts are unique in that “iffy” numbers can be implied to determine what such numbers would be if calculated by a party “acting reasonably.”
In Fl. and some other states, even bargaining for a detriment qualifies as consideration if truly bargained for, e.g. paying money (a loss) to a party who refrains from e.g., smoking, drinking (which benefits the party forgoing the legal right)
The U.C.C. and its Article 2 dispel with the need for consideration in at least two interesting situations: 1) the “extra” consideration for an option contract (exclusive time to accept) which is required at common law; and 2) for modifications of a contract, which need not be supported by new consideration (see U.C.C. §2-209(1)). Such would be required at common law.
© 2018 Paul J. Carrier, Paul J Carrier, LLC Blue – Category Recognition; White – Specific Category; Yellow – “Black Letter” Rules (to be memorized); Green – Main Factual Issues – Analysis; Red – Upper-Level, Integrated Comprehension