Consideration Forum

[JazzOne]

What I'm not clear on, is cases where the promisor doesn't actually benefit, but the promisee is harmed. Like paying someone to run 20 miles.

I think the Hamer case basically stands for the proposition that the correct standard is "legal detriment," not "benefit." It didn't matter if the uncle benefitted because the nephew suffered a legal detriment either way. Both parties must suffer a legal detriment to constitute consideration, and courts will typically not inquire as to whether the parties benefitted from the contract. Indeed, many contracts are "losing" deals for one of the parties.

Edit: Now that I think about it, the Hamer court discussed the benefit to the uncle. Perhaps it was later case law that made it clear that legal detriment is the proper measure of consideration.

[nleefer]

My advice is don't get so caught up in "benefit/detriment" descriptions. The driving force behind contract theory is that people value things subjectively and differently. You might argue that running 20 miles is a benefit not a detriment to the runner, but in fact, as long as the running was bargained for and desired by the other party it's likely sufficient consideration.

Consideration is simply that which is bargained for in exchange for a promise or other return consideration. To have a contract there needs to be valid consideration on both sides.

[BarbellDreams]

Well put. People get too caught up in the whole benefit/detriment thing. If Hamel taught us anything it is that it doesnt really matter. If I ask you to do 20 jumping jacks every morning and in exchange I will give you $1 every morning, I receive no benefit but its still consideration. Remember that it is Benefit to promisor OR detriment to promisee. Its an OR not an AND so you only need one. As long as it has been bargained for and one of them exists there is consideration.

[Grizz]

What I'm not clear on, is cases where the promisor doesn't actually benefit, but the promisee is harmed. Like paying someone to run 20 miles.

I think the Hamer case basically stands for the proposition that the correct standard is "legal detriment," not "benefit." It didn't matter if the uncle benefitted because the nephew suffered a legal detriment either way. Both parties must suffer a legal detriment to constitute consideration, and courts will typically not inquire as to whether the parties benefitted from the contract. Indeed, many contracts are "losing" deals for one of the parties.

Edit: Now that I think about it, the Hamer court discussed the benefit to the uncle. Perhaps it was later case law that made it clear that legal detriment is the proper measure of consideration.

The courts have moved away from a "benefit detriment" definition of consideration, as seen in Hamer.

[Grizz]

Well put. People get too caught up in the whole benefit/detriment thing. If Hamel taught us anything it is that it doesnt really matter. If I ask you to do 20 jumping jacks every morning and in exchange I will give you $1 every morning, I receive no benefit but its still consideration. Remember that it is Benefit to promisor OR detriment to promisee. Its an OR not an AND so you only need one. As long as it has been bargained for and one of them exists there is consideration.

I'd concentrate on the italicized much more than the bolded. Consideration pretty much always does always involve a benefit or a detriment, but the bargain is what makes it consideration, not the benefit or detriment per se.

[Grizz]

What I'm not clear on, is cases where the promisor doesn't actually benefit, but the promisee is harmed. Like paying someone to run 20 miles.

Under today's rules, the benefit or detriment doesn't really matter, as long as the exchange was bargained for.

[GeePee]

What I'm not clear on, is cases where the promisor doesn't actually benefit, but the promisee is harmed. Like paying someone to run 20 miles.

Under today's rules, the benefit or detriment doesn't really matter, as long as the exchange was bargained for.

I'm not sure that being "bargained for" is a necessary requirement for a valid K, but it is certainly sufficient. Webb v. McGowin, for example, is a case where a K was upheld despite lack of a "bargained for" agreement. The promisor was under no material obligation to make a promise, other than a past circumstance resulting in a detriment to the promisee and a relative benefit to the promisor (not being dead). Yet this was still considered valid.

The benefit-detriment analysis is still valuable, despite the existence of "bargained for" analysis.

[savagecheater]

What I'm not clear on, is cases where the promisor doesn't actually benefit, but the promisee is harmed. Like paying someone to run 20 miles.

Forebearance constitutes consideration.

In a sense, you're paying for the privilege of having someone deny themselves their comforts.

[jdubb990]

Contracts are so f'n boring. Even the E&E's are boring...

[09042014]

What I'm not clear on, is cases where the promisor doesn't actually benefit, but the promisee is harmed. Like paying someone to run 20 miles.

Forebearance constitutes consideration.

In a sense, you're paying for the privilege of having someone deny themselves their comforts.

My teacher pretty clearly doesn't teach it that way. Or at least makes sure its a gray area. I'm wondering if he is just teaching his own opinion or what. Sounds like at this point I should talk to him.

[RickyMack]

I'm not sure that being "bargained for" is a necessary requirement for a valid K, but it is certainly sufficient.

From my understanding Webb v. McGowin is an example of a Promise+Antecedent benefit, which can validate a K in place of lack of consideration. Also there's an issue of detrimental reliance as well.

[RickyMack]

What I'm not clear on, is cases where the promisor doesn't actually benefit, but the promisee is harmed. Like paying someone to run 20 miles.

Forebearance constitutes consideration.

In a sense, you're paying for the privilege of having someone deny themselves their comforts.

My teacher pretty clearly doesn't teach it that way. Or at least makes sure its a gray area. I'm wondering if he is just teaching his own opinion or what. Sounds like at this point I should talk to him.

depends, if the restatement applies §71(3)(b) then forbearance does constitute consideration. i'd say clear it up with him, professor's opinion trumps all. we aren't grading your paper.

[savagecheater]

What I'm not clear on, is cases where the promisor doesn't actually benefit, but the promisee is harmed. Like paying someone to run 20 miles.

Forebearance constitutes consideration.

In a sense, you're paying for the privilege of having someone deny themselves their comforts.

My teacher pretty clearly doesn't teach it that way. Or at least makes sure its a gray area. I'm wondering if he is just teaching his own opinion or what. Sounds like at this point I should talk to him.

depends, if the restatement applies §71(3)(b) then forbearance does constitute consideration. i'd say clear it up with him, professor's opinion trumps all. we aren't grading your paper.

Good point. My teacher pretty clearly taught us that forebearance can be consideration, but yours may be different.

[onthecusp]

Restatement 69
Acceptance by Silence or Exercise of Dominion
(1) Where an offeree fails to reply to an offer, his silence and inaction operate as an acceptance in the following cases only:
a. Where an offeree takes the benefit of offered services with reasonable opportunity to reject them and reason to know that they were offered with the expectation of compensation.
b. Where the offeror has stated or given the offeree reason to understand that assent may be manifested by silence or inaction, and the offeree in remaining silent and inactive intends to accept the offer.
c. Where because of previous dealings or otherwise, it is reasonable that the offeree should notify the offeror if he does not intend to accept.
(2) An offeree who does any act inconsistent with the offeror's ownership of offered property is bound in accordance with the offered terms unless they are manifestly unreasonable. But if the act is wrongful as against the offeror it is an acceptance only if ratified by him.

Sorry, but you still just got pwnt. The fact that the law has evolved to imply an offer and acceptance from past conduct doesn't mean that there really, actually was an offer and acceptance.

Sure it does, if according to the law they are able to recognize an offer and acceptance where they can define clear and definite terms and provide a remedy, then a contract exists, where they can identify the offer and acceptance. /discussion

[onthecusp]

Hamer v. Sidway. Though it could be argued the uncle "benefitted" from the emotional comfort gained by knowing his nephew wasn't smoking, etc. I think the court focused more on the detriment to the nephew.

I don't think your example shows that no detriment = no contract, it has more to do with the idea that past consideration =/= new consideration, or you can't contractually agree to do something you're already obligated (by contract) to do.

Edit: And now I'm questioning my knowledge of consideration. Guess I'll look at that this weekend.

Forbearance of a legal right is good consideration.

[GeePee]

Restatement 69
Acceptance by Silence or Exercise of Dominion
(1) Where an offeree fails to reply to an offer, his silence and inaction operate as an acceptance in the following cases only:
a. Where an offeree takes the benefit of offered services with reasonable opportunity to reject them and reason to know that they were offered with the expectation of compensation.
b. Where the offeror has stated or given the offeree reason to understand that assent may be manifested by silence or inaction, and the offeree in remaining silent and inactive intends to accept the offer.
c. Where because of previous dealings or otherwise, it is reasonable that the offeree should notify the offeror if he does not intend to accept.
(2) An offeree who does any act inconsistent with the offeror's ownership of offered property is bound in accordance with the offered terms unless they are manifestly unreasonable. But if the act is wrongful as against the offeror it is an acceptance only if ratified by him.

Sorry, but you still just got pwnt. The fact that the law has evolved to imply an offer and acceptance from past conduct doesn't mean that there really, actually was an offer and acceptance.

Sure it does, if according to the law they are able to recognize an offer and acceptance where they can define clear and definite terms and provide a remedy, then a contract exists, where they can identify the offer and acceptance. /discussion

Circularity FTW!

[JazzOne]

Restatement 69
Acceptance by Silence or Exercise of Dominion
(1) Where an offeree fails to reply to an offer, his silence and inaction operate as an acceptance in the following cases only:
a. Where an offeree takes the benefit of offered services with reasonable opportunity to reject them and reason to know that they were offered with the expectation of compensation.
b. Where the offeror has stated or given the offeree reason to understand that assent may be manifested by silence or inaction, and the offeree in remaining silent and inactive intends to accept the offer.
c. Where because of previous dealings or otherwise, it is reasonable that the offeree should notify the offeror if he does not intend to accept.
(2) An offeree who does any act inconsistent with the offeror's ownership of offered property is bound in accordance with the offered terms unless they are manifestly unreasonable. But if the act is wrongful as against the offeror it is an acceptance only if ratified by him.

Sorry, but you still just got pwnt. The fact that the law has evolved to imply an offer and acceptance from past conduct doesn't mean that there really, actually was an offer and acceptance.

Sure it does, if according to the law they are able to recognize an offer and acceptance where they can define clear and definite terms and provide a remedy, then a contract exists, where they can identify the offer and acceptance. /discussion

No, consideration is still necessary. I could offer to give you a gift of $100, and you could accept, and we would still not have formed a contract even though there is an obvious remedy.

I think there is some misunderstanding about what is meant by the term "legal detriment." A legal detriment is agreeing to do something which you would not otherwise be obligated to do. This narrow definition of consideration is sufficient to nearly all cases, except the strange situations like prior detriment and unconscionability. In general, the promise must constitute a legal detriment to be consideration, and almost any legal detriment is valid consideration.

[Always Credited]

Restatement 69
Acceptance by Silence or Exercise of Dominion
(1) Where an offeree fails to reply to an offer, his silence and inaction operate as an acceptance in the following cases only:
a. Where an offeree takes the benefit of offered services with reasonable opportunity to reject them and reason to know that they were offered with the expectation of compensation.
b. Where the offeror has stated or given the offeree reason to understand that assent may be manifested by silence or inaction, and the offeree in remaining silent and inactive intends to accept the offer.
c. Where because of previous dealings or otherwise, it is reasonable that the offeree should notify the offeror if he does not intend to accept.
(2) An offeree who does any act inconsistent with the offeror's ownership of offered property is bound in accordance with the offered terms unless they are manifestly unreasonable. But if the act is wrongful as against the offeror it is an acceptance only if ratified by him.

Sorry, but you still just got pwnt. The fact that the law has evolved to imply an offer and acceptance from past conduct doesn't mean that there really, actually was an offer and acceptance.

Sure it does, if according to the law they are able to recognize an offer and acceptance where they can define clear and definite terms and provide a remedy, then a contract exists, where they can identify the offer and acceptance. /discussion

No, consideration is still necessary. I could offer to give you a gift of $100, and you could accept, and we would still not have formed a contract even though there is an obvious remedy.

I think there is some misunderstanding about what is meant by the term "legal detriment." A legal detriment is agreeing to do something which you would not otherwise be obligated to do. This narrow definition of consideration is sufficient to nearly all cases, except the strange situations like prior detriment and unconscionability. In general, the promise must constitute a legal detriment to be consideration, and almost any legal detriment is valid consideration.

This is correct. But watch out for nominal consideration, which may not hold up under the "bargain" of the exchange.

[JazzOne]

Restatement 69
Acceptance by Silence or Exercise of Dominion
(1) Where an offeree fails to reply to an offer, his silence and inaction operate as an acceptance in the following cases only:
a. Where an offeree takes the benefit of offered services with reasonable opportunity to reject them and reason to know that they were offered with the expectation of compensation.
b. Where the offeror has stated or given the offeree reason to understand that assent may be manifested by silence or inaction, and the offeree in remaining silent and inactive intends to accept the offer.
c. Where because of previous dealings or otherwise, it is reasonable that the offeree should notify the offeror if he does not intend to accept.
(2) An offeree who does any act inconsistent with the offeror's ownership of offered property is bound in accordance with the offered terms unless they are manifestly unreasonable. But if the act is wrongful as against the offeror it is an acceptance only if ratified by him.

Sorry, but you still just got pwnt. The fact that the law has evolved to imply an offer and acceptance from past conduct doesn't mean that there really, actually was an offer and acceptance.

Sure it does, if according to the law they are able to recognize an offer and acceptance where they can define clear and definite terms and provide a remedy, then a contract exists, where they can identify the offer and acceptance. /discussion

No, consideration is still necessary. I could offer to give you a gift of $100, and you could accept, and we would still not have formed a contract even though there is an obvious remedy.

I think there is some misunderstanding about what is meant by the term "legal detriment." A legal detriment is agreeing to do something which you would not otherwise be obligated to do. This narrow definition of consideration is sufficient to nearly all cases, except the strange situations like prior detriment and unconscionability. In general, the promise must constitute a legal detriment to be consideration, and almost any legal detriment is valid consideration.

This is correct. But watch out for nominal consideration, which may not hold up under the "bargain" of the exchange.

Right. I almost ended my post with a caveat regarding reciprocal inducement, but I figured that would open up a whole other can of worms.

[onthecusp]

This is correct. But watch out for nominal consi-deration, which may not hold up under the "bargain" of the exchange.

Right. I almost ended my post with a caveat regarding reciprocal inducement, but I figured that would open up a whole other can of worms.

Reciprocal Inducement is probably the phrase that causes the least confusion. At the end of the day, what is consideration really? A promise for a promise, a thing for a thing, performance for performance, or any combination of the three. It doesn't necessarily have to be a detriment. The most confusing thing about consideration IMO is that the courts have ruled that they have no right to criticize what one deems fair consideration, yet there is the nominal consideration bit. At the end of the day, "inducement" brings clarity.

"For what reason will I give you this thing"
"Because I will perform this, or serve that, or give you this."

I have to get something in return, and it can't be something you are already legally obligated to give me, and although it doesn't have to be of substantial value compared what I am giving, it can't be merely symbolic in nature. In other words, the court has to see where it has some meaning respective to the parties. A family air-loom, a promise to name a kid, promise to set up a memorial fund in donor's name, promise to forebear a legal right; where the dollar value is unclear, it has to be prevalent that intangible value exists.

[Always Credited]

This is correct. But watch out for nominal consi-deration, which may not hold up under the "bargain" of the exchange.

Right. I almost ended my post with a caveat regarding reciprocal inducement, but I figured that would open up a whole other can of worms.

Reciprocal Inducement is probably the phrase that causes the least confusion. At the end of the day, what is consideration really? A promise for a promise, a thing for a thing, performance for performance, or any combination of the three. It doesn't necessarily have to be a detriment. The most confusing thing about consideration IMO is that the courts have ruled that they have no right to criticize what one deems fair consideration, yet there is the nominal consideration bit. At the end of the day, "inducement" brings clarity.

"For what reason will I give you this thing"
"Because I will perform this, or serve that, or give you this."

I have to get something in return, and it can't be something you are already legally obligated to give me, and although it doesn't have to be of substantial value compared what I am giving, it can't be merely symbolic in nature. In other words, the court has to see where it has some meaning respective to the parties. A family air-loom, a promise to name a kid, promise to set up a memorial fund in donor's name, promise to forebear a legal right; where the dollar value is unclear, it has to be prevalent that intangible value exists.

Nominal consideration is a safeguard against the courts having their hands tied when, say, a daughter walks in looking to uphold her contract with dad for her new BMW, for which she gave $1, but then got caught smoking pot under the bleachers so daddy took it away. Clearly this wasn't a contract (nor is the example 100% realistic, but you get it) and clearly it wasn't "bargained for", so consideration is nominal, sham, bullshit, whatever you want to call it.

[JazzOne]

This is correct. But watch out for nominal consi-deration, which may not hold up under the "bargain" of the exchange.

Right. I almost ended my post with a caveat regarding reciprocal inducement, but I figured that would open up a whole other can of worms.

Reciprocal Inducement is probably the phrase that causes the least confusion. At the end of the day, what is consideration really? A promise for a promise, a thing for a thing, performance for performance, or any combination of the three. It doesn't necessarily have to be a detriment. The most confusing thing about consideration IMO is that the courts have ruled that they have no right to criticize what one deems fair consideration, yet there is the nominal consideration bit. At the end of the day, "inducement" brings clarity.

"For what reason will I give you this thing"
"Because I will perform this, or serve that, or give you this."

I have to get something in return, and it can't be something you are already legally obligated to give me, and although it doesn't have to be of substantial value compared what I am giving, it can't be merely symbolic in nature. In other words, the court has to see where it has some meaning respective to the parties. A family air-loom, a promise to name a kid, promise to set up a memorial fund in donor's name, promise to forebear a legal right; where the dollar value is unclear, it has to be prevalent that intangible value exists.

I agree with most of your thoughts, but I challenge you to think of one example of valid consideration that is not a legal detriment (as I defined it above: promising to do something which you were not otherwise legally obligated to do).

[Cupidity]

What I'm not clear on, is cases where the promisor doesn't actually benefit, but the promisee is harmed. Like paying someone to run 20 miles.

Consideration can be either a benefit to the promisor or a detriment to the promisee. Think Hamer. Nearly anything can be consideration, however it must be genuine, IE: not a joke, not a fraud, and no money for lesser money.

[JazzOne]

What I'm not clear on, is cases where the promisor doesn't actually benefit, but the promisee is harmed. Like paying someone to run 20 miles.

Consideration can be either a benefit to the promisor or a detriment to the promisee. Think Hamer. Nearly anything can be consideration, however it must be genuine, IE: not a joke, not a fraud, and no money for lesser money.

Lucy v. Zehmer

[Cupidity]

What I'm not clear on, is cases where the promisor doesn't actually benefit, but the promisee is harmed. Like paying someone to run 20 miles.

Consideration can be either a benefit to the promisor or a detriment to the promisee. Think Hamer. Nearly anything can be consideration, however it must be genuine, IE: not a joke, not a fraud, and no money for lesser money.

Lucy v. Zehmer

I was thinking Fischer v. Union Trust