1. CHAPTER 15: BARGAINED-FOR CONSIDERATION

2. Learning Objectives: Nature of the Consideration Requirement Bargain Theory of Consideration Mutuality of Obligation Contacts Valid Without Consideration Chapter 152 CHAPTER 15: BARGAINED-FOR CONSIDERATION

3. 1.Not every agreement (offer + acceptance) will be enforced in a court. 2.Concept: Bargained-for exchange in the legal position of the parties. Chapter 153 NATURE OF THE CONSIDERATION REQUIREMENT

4. 1.Introduction to the Concepts of Legal Benefit and Legal Detriment a.Both Parties Should Receive a Legal Benefit and Incur a Legal Detriment b.Consideration is the Price Paid for a Promise 2.Elements of a Bargain 3.Adequacy of Consideration Chapter 154 BARGAIN THEORY OF CONSIDERATION

5. 1.Introduction to the Doctrine of Mutuality of Consideration (applicable only to bilateral contracts) Chapter 155 MUTUALITY OF OBLIGATION

6. 2.Categories where there is NO mutuality: a.Illusory Promises i.Lack of a Legal Detriment ii.Examples iii.Special Case: Requirements and Output Contracts Chapter 156 MUTUALITY OF OBLIGATION

7. 2.Categories where there is NO mutuality: a.Illusory Promises b.Preexisting Duty i.Definition: One makes a promise when they are already under an obligation to act or not act. ii.Categories in which Preexisting Duty Problems Arise Chapter 157 MUTUALITY OF OBLIGATION

8. I.Modification of Non-Code Contracts A.Nature of Area B.Exceptions to Preexisting Duty Rule: 1.Changes in Duties (e.g., new duty) 2.Unforeseen Difficulties 3.Rescission Chapter 158 CATEGORIES IN WHICH PRE- EXISTING DUTY PROBLEMS ARISE

9. I.Modification of Non-Code Contracts II.Modification of Code Contracts A.Areas Where No Consideration is Necessary Where the Parties Agree to Change the Terms of an Existing Contract B.Role of Good Faith Chapter 159 CATEGORIES IN WHICH PRE- EXISTING DUTY PROBLEMS ARISE

10. I.Modification of Non-Code Contracts II.Modification of Code Contracts III.Discharges A.Discharge of Liquidated Debts B.Discharge of Unliquidated Debts Chapter 1510 CATEGORIES IN WHICH PRE- EXISTING DUTY PROBLEMS ARISE

11. 2.Categories where there is NO mutuality: a.Illusory Promises b.Preexisting Duty c.Forbearance Chapter 1511 MUTUALITY OF OBLIGATION

12. 1.Promissory Estoppel 2.Moral Obligation 3.Firm Offers and Renunciations Chapter 1512 CONTRACTS VALID WITHOUT CONSIDERATION

13. CHAPTER 15: BARGAINED-FOR CONSIDERATION