1. LAW for Business and Personal Use © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 8 SLIDE 1 8-3When Consideration Is Not Required  GOALS  Distinguish situations in which consideration is not needed  Recognize when the doctrine of promissory estoppel can be applied

2. LAW for Business and Personal Use © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 8 SLIDE 2 EXCEPTIONS TO THE REQUIREMENT OF CONSIDERATION  Promises to charitable organizations  Promises covered by the UCC  Firm offers  Modifications  Promises barred from collection by statute  Statute of repose and limitations  Debts discharged in bankruptcy  Promissory estoppel

3. LAW for Business and Personal Use © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 8 SLIDE 3 CHECKPOINT  Name four exceptions to the requirement of consideration.     

4. LAW for Business and Personal Use © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 8 SLIDE 4 PREVENT LEGAL DIFFICULTIES  Remember that under contract law...  Generally both parties must give and receive consideration if their agreement is to be enforceable as a contract.  Adequacy of consideration generally is immaterial to whether or not a contractual promise is enforceable. Continued on the next slide

5. LAW for Business and Personal Use © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 8 SLIDE 5 PREVENT LEGAL DIFFICULTIES  Accepting money in exchange for giving up a legal right constitutes consideration and is binding. Consult a lawyer before making such an agreement in any major dispute.  A pledge to a charitable institution is generally binding without consideration and should not be made unless you intend to fulfill it. Continued on the next slide

6. LAW for Business and Personal Use © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 8 SLIDE 6 PREVENT LEGAL DIFFICULTIES  Generally, however, promises to make gifts cannot be enforced by the intended donee.  You should use care and good judgment in making contracts. Courts generally will not rescue you from “bad bargains” or unfavorable deals voluntarily made.