1. Pages 140-153 BY: ALEXIS ESPADA

2. Mutual Consideration -Consideration is an essential element for the formation of a contract. It may consist of a promise to perform a desired act or a promise to refrain from doing an act that one is legally entitled to do.

3. Elements of Consideration -Promisor: A person promising an action or forbearance is the Promisor. -Promisee: The person to whom the promise is made is the promisee. -Consideration: What one gives and receives in a contract. -Forbearance: Restraint or Tolerance/ Refraining from doing what one has a right to do.

4. Three Requirements of consideration Act, Forbearance, or Promise Trading Legal Value

5. Legally sufficient consideration may take the form of: Promising to do something that the promisee has no prior legal duty to do. Performing an action that the Promisee is not otherwise obligated to undertake. Refraining from exercising a legal right that the promisee is otherwise entitled to exercise.

6. Unilateral Contract In a unilateral contract, an agreement to pay in exchange for performance, if the potential performer chooses to act.

7. Bilateral Contract An agreement formed by an exchange of a promise in which the promise of one party is consideration supporting the promise of the other party.

8. Consideration Exceptions Past consideration Rewards Promissory Estoppel State Statuates Charitable Organization Adequacy of Consideration Preexisting Duty

9. Purpose of Consideration Gift- The transfer of ownership without receiving anything in return. Donor- The person giving the gift Donee- The person receiving the gift.

10. Legal Concepts Consideration can be given by conferring (promising to confer). A benefit or by (promising to incur) a detriment. Legal value can also arise from the exchange of two detriments. Economic value Is unimportant as long as there is genuine agreement. A big different in economic value of what one gives and receives may be evidence of mutual mistake, duress, undue influence, or fraud.

11. Questions of Legal Concepts 1. A promise of a gift is enforceable in court? (True or False?) 2. A valid gift arises when there has been a transfer of possession with the intent to transfer ownership. (True or False?) 3. A person who makes a gift is Donee. (True or False?)

12. Questions of Legal Concepts 4. Consideration can be found in the exchange of benefits or in the trading of benefit for a detriment, or in the bargaining to exchange two detriment. (True or False?) 5. To create an enforceable contract, the things exchange must have approximately the same economic value. (True or False?)

13. Thinking Critically about evidence A four-piece high school rock band practices for at least one hour most days of the week. Its studio is the garage of the drummer’s home. The music was so loud that it violated a noise ordinance. Several neighbors offered to pay the rent at a local mini-warehouse as a practice room for a year if the group agreed to stop practicing at the drummer’s home. The players agreed. Did the neighbors receive consideration? Did the rock band receive consideration? Did the rock band receive a benefit, endure a detriment, both or neither? Was the contract enforceable? Would it make a difference if the band’s music didn’t violate the noise ordinance?