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1.1 Consideration defined I.
II. R2d SS71 (1) To constitute consideration, a performance or a return promise must be bargained for. (2) A performance or return promise is bargained for if it is sought by the promisor in exchange for his promise and is given by the promisee in exchange for that promise. (3) The performance may consist of (a) an act other than a promise, or (b) a forbearance, or (c) the creation, modification, or destruction of a legal relation. (4) The performance or return promise may be given to the promisor or to some other person. It may be given by the promisee or by some other person. Fuller's Three Functions of Consideration a. evidentiary function - evidence that an agreement or promise exists when that existence is in dispute b. cautionary or deterrent function - helps ensure that a hasty, unreasonable promise, will not be enforced to the disadvantage of the promisor c. provides a legal framework to express intention
1.2 Gift or gratuitous promises I. II.
Gratuitous promises: promises to make gifts have no consideration, esp. intra-familial gift (no "bargain" element); Existence of condition to receive gift: Even if the person promising to make a gift requires the promisee to meet certain conditions in order to receive the gift, there will still be no consideration if the meeting of the conditions is not really "bargained for" by the promisor. (I'll give you this book if you come up to my office) a. Occurrence of condition is of benefit to promisor: But if the promisor imposes a condition, and the occurrence of this condition is of benefit to him, then the bargain element probably will be present. Condition to use a donation in a certain way FORK a. No consideration: the promisee's promise to use the fund is not a legal detriment because at the time of the promise, the donor has not handed over the money, and the promisee has no legal right to use the money yet. Therefore there is no forbearance at the time the promise is made. b. Consideration: committing the use of fund only for the express purpose required by the donor. Policy argument of public interest. Altruistic pleasure not sufficient: the fact that one who promises to make a gift expects to derive altruistic pleasure, or love and
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