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CONSIDERATION 3 Approaches [General Rule = mutuality of obligation required in bilateral contracts—BOTH parties must be bound] For UNILATERAL contracts, do NOT discuss mutuality of obligation, as only 1 party is bound – Wilma promises to pay Barney $300 if he cuts down a tree – it’s specifically specified that ONLY THE ACT WILL DO, not a promise to cut down the tree Benefit/detriment approach – benefit received by promisor, or detriment to promisee Enforceable factor approach – including reliance on a promise by the other party, promises given in return for nonbargained-for acts/promises; waver of nonmaterial conditions of the bargain, promises under seal – these promises are NOT bargains but ARE enforceable Bargain approach – stage 2 of ^ treat consideration as equivalent to bargain – an exchange of promises, acts, both relative to price of what’s received; it’s an exchange of promises – 1 party’s promise/performance is the cost of the other’s. A BARGAINED-FOR PROMISE IS ENFORCEABLE. Bargain = negotiation resulting in voluntary assumption of an obligation by 1 party upon the condition of an act or forbearance by the other. Performance can be: an act other than a promise, a forbearance, or the creation, modification or destruction of a legal relation Equal value is NOT required Barring unconscionability, courts don’t look @ whether bargain contains commensurate values in subject matter BUT gross disparity can be evidence to support defenses = fraud, duress, etc. * Equity normally requires a showing of FAIRNESS or substantial EQUIVALENCE Substitutes for Consideration Promissory Estoppel (But usually going for a full-out contract argument is better) Writing Part performance Some cases use a seal as a substitute Bargains that are NOT CONSIDERATION [UNENFORCEABLE] Nominal consideration – a bargain in form, but not in substance Donative promises are NOT ENFORCEABLE w/o consideration Options = promises to hold an offer open for a fixed amount of time. These ARE ENFORCE