Elements of a Contract• Offer• Acceptance• Genuine Agreement• Consideration• Capacity• Legality

Consideration

• Consideration is the exchange of benefits and detriments by the parties to an agreement.

• Benefits – something that a party was not previously entitled to

• Detriments – Any loss suffered

Void or Voidable

Certain agreements lack consideration and consequently are unenforceable:

• Gifts• Promise to obey the law• Fulfill another preexisting duty

Gifts

• A gift is something that is given freely, not providing consideration.

• Once given, a gift has the status of an executed contract.

• The promise of a gift is not enforceable.

Promise to Obey the Law

• Since everyone is obligated to obey the law, a promise to do so is not detriment.

Preexisting Duty

• If a person is already under legal duty to do something, a promise to do that same thing does not furnish consideration.

• Ex: a police man asking for a reward for catching a criminal

Past Consideration

• Giving or exchanging benefits by the parties must take place when the contract is made.

• If consideration took place in the past or is given for something that has already been done, the courts will not regard that consideration as legal.

• The courts will not enforce any contract based on past consideration.

Illusory Promise• Illusory – has false appearance• Some contracts are illusory; at

first glance they appear to bind both parties. Under further examination, it is clear that they do not.

• Ex: One person agrees to buy all of the apples that they purchase from Erin’s Apple Farm over a the next year. Neither knows how much, if any will be purchased.

Adequacy

• Courts do not usually look at whether the contract is fair to both parties or not.

• Occasionally a court may refuse to enforce a contract or a portion of it if the court finds the contract unconscionable.

• Unconscionable – The contract is so one-sided that it unfairly oppresses one party and unreasonably favors the other party.

Promises Enforceable With Out Consideration

• Some promises are enforceable without consideration if the promise influences the behavior of another. If they are not enforced, those relying on them may suffer damages.

• This is called promissory estoppel.• Ex: Pledges and Subscriptions

By: Aly Matuck

Annie SheltonMikey Frost