FIN 240 Lecture Notes - Lecture 16: Contract, Precontract, Estoppel
Document Summary
Consideration - value given in return for a promise (in a bilateral contract) or in return for a performance (in a unilateral contract. Legally sufficient value" - must have legal value and may consist of the following: Promise to do something that one has no prior legal duty to do. Performance of an action that one is otherwise not obligated to undertake. Forbearance - refraining from an action that one has a legal right to undertake. Consideration in bilateral contracts normally consists of a promise in return for a promise. Unilateral contracts involve a promise in return for a performance (action) Bargained-for-exchange" - consideration must provide the basis for the bargain struck between the contracting parties. Item of value must be given or promised by the promisor in return for the promisee"s promise, performance, or promise of performance. Adequacy of consideration - fairness of the bargain.
