Mutual Consideration

1
Chapter 11

• Mutual Consideration

2
What is Consideration?

• Promisor - the person who gives the promise or
  action in exchange for the promise or action of
  another.
• Promisee -the person to whom the promise or
  action is given in exchange for the other
  persons promise or action
• Consideration -what on gives and receives in a
  contract
• Forbearance -refraining from doing what one has a
  right to do.

3
Why is Consideration Required?

• Gift -the voluntary transfer of ownership of
  property without receiving consideration in
  return.
• Seal -an impression on a document, a paper, or
  wax affixed to the document, or the word Seal
  or the letters L.S.on the document indication
  that the parties intend to be legally bound.

4
What is Sufficient Consideration?

• Nominal Consideration -a token amount
  (consideration) identified in a written
  contract when parties wither cannot or do not
  wish to state the amount precisely

5
Is an Existing Obligation Consideration?

• Compromise if a disputed claim -mutual promises
  to refrain from bringing suit.
• Composition of creditors -agreement of all
  creditors to accept a proportion of their claims
  as full payment.

6
Is past Performance Consideration?

• Past Consideration -value given before a contract
  is made.

7
What are exceptions to the requirement of mutual
consideration?

• Promises of Financial Support to Charitable
  Organizations.
• Promissory Estoppel
• Promissory Estoppel -when a promise is enforced
  even though no consideration is given for it.
• Commercial Paper
• State Statutory exceptions