George Mason School of Law
Contracts I
Consideration
F.H. Buckley
fbuckley@gmu.edu
1
The need for a consideration
 Restatement § 17(1)
 Agreement and Bargain: § 3
 Definition § 71
2
The need for a consideration
 How is consideration defined in
Hamer v. Sidway?
3
Hamer v. Sidway
The nephew was going to the dogs…
4
Hamer v. Sidway
 What is the benefit-detriment
standard?
 Do we have to ask whether it was a real
detriment?
 Or whether it was a benefit to the uncle?
5
Hamer v. Sidway
 What is the benefit-detriment
standard?
 Can you suggest why the uncle might
have intended that the promise be
legally enforceable?
6
Hamer v. Sidway
 What is the benefit-detriment
standard?
 Can you suggest why the uncle might
have intended that the promise be
legally enforceable?
 Animus contrahendi: Restatement § 21
7
Kirksey
 Why did Isaac invite Antillico to
Talladega county?
8
Kirksey
 Why did Isaac invite Antillico to
Talladega county?
 Was there a benefit to Isaac?
 A detriment to Antillico?
9
Kirksey
 Why did Isaac invite Antillico to
Talladega county?
 Was there a benefit to Isaac?
 A detriment to Antillico?
 Williston’s tramp?
10
Kirksey
 Why did Isaac invite Antillico to
Talladega county?
 Do you think Isaac intended legal
liability?
 And is that determinative?
11
St. Peter v. Pioneer
 Why didn’t the theatre restrict bank
night to paying patrons?
12
St. Peter v. Pioneer
 Why didn’t the theatre restrict bank
night to paying patrons?
 So was there a contract with nonpaying people waiting outside?
13
St. Peter v. Pioneer
 Why didn’t the theatre restrict bank
night to paying patrons?
 So was there a contract with nonpaying people waiting outside?
 How was the Π to accept?
14
St. Peter v. Pioneer
 Why didn’t the theatre restrict bank
night to paying patrons?
 Can you articulate why the theatre
might have wanted the promise to be
binding?
 Recall Lefkowitz
15
The Bargain Theory
Restatement § 72
 How would you define it?
 Is it broader or narrower than the
benefit/detriment theory?
16
The Bargain Theory
Restatement § 72
 How would you define it?
 You and I want to see a date for lunch
but quarrel over the date. Is this
bargaining?
17
The Bargain Theory
Restatement § 72
 How would you define it?
 You and I want to see a date for lunch
but quarrel over the date. Is this
bargaining?
 Was Kirksey a bargain situation? What
about Hamer v. Sidway?
18
The Bargain Theory
Restatement § 72
 How would you define it?
 Spiedel at 134 on the move to a
capitalist economy
19
The Bargain Theory
Restatement § 72
 So what’s the point of the bargain
theory?
 Is it ideological-a subsidy for capitalism?
 Or is something else going on?
20
What if there’s no bargain:
Gratuitous Promises
 Uncle Ebenezer might want to bind
himself? So how does he do so?
 At common law, a gift is effective if:
 Donative intent (animus donandi)
 Delivery by donor
 Acceptance by donee
21
What if there’s no bargain:
Gratuitous Promises
 Uncle Ebenezer might want to bind
himself? So how does he do so?
 What constitutes delivery by donor?
 Actual delivery of gift
 Constructive delivery (e.g. key to car or
house)
 Deed of gift
22
The seal
23
The seal
 Definition: Restatement § 96
 Effect of seal: Restatement § 95(1)
24
What’s wrong with
formalism?
Spondeo!
25
Spodese
mihi
dare?
Lon Fuller on Consideration
 The evidentiary function
 Evidence that a promise exists
26
Lon Fuller on Consideration
 The evidentiary function
 Evidence that a promise exists
 The deterrent function
 a check against rash promises
27
Lon Fuller on Consideration
Remember the Statute of Frauds?
 The evidentiary function
 Evidence that a promise exists
 The deterrent function
 a check against rash promises
 The channeling function
 “channels for the legally effective
expression of intention”
28
Lon Fuller on Consideration
 Does all this simply come down to the
intention to be legally bound?
Is that all
there is?
29
Lon Fuller on Consideration
 Does this all come down to the
intention to be legally bound?
 If so, what does this tell you about
the standard for adequacy of
consideration?
A peppercorn
30
Wolford v. Powers 142
 What was the consideration from the
Wolfords?
31
Wolford v. Powers
 What was the consideration from the
Wolfords?
 Adequacy irrelevant: Restatement § 79
32
Wolford v. Powers
 What was the consideration from the
Wolfords?
 What was the relevance of the
subsequent care provided to Lehman
33
Wolford v. Powers
 What was the consideration from the
Wolfords?
 What was the relevance of the
subsequent care provided to Lehman
 The past consideration doctrine
 How would you apply Restatement § 86 in
Wofford?
34
Performance of Prior Legal Obligation
 A reward is offered for apprehension
of a thief. Policeman catches thief in
performance of his duties.
 Is there consideration?
35
Performance of Prior Legal Obligation
 A reward is offered for apprehension
of a thief. Policeman catches thief in
performance of his duties.
 Restatement § 73
36
Performance of Prior Legal Obligation
 A reward is offered for apprehension
of a thief. Policeman catches thief in
performance of his duties.
 Why is this a sensible policy?
37
Performance of Prior Legal Obligation
 A reward is offered for apprehension
of a thief. Policeman catches thief in
performance of his duties.
38
Performance of Prior Legal Obligation
 A reward is offered for apprehension
of a thief. Policeman catches thief in
performance of his duties.
 What do you think of the proviso at the
end?
39
Performance of Prior Legal Obligation
 Compromise with creditors?
40
Performance of Prior Legal Obligation
 Compromise with creditors?
 Restatement § 73, illustration 6
41
Does the promisee’s motive matter?
 Williams v. Carwardine (p. 147)
 The status of dying declarations
 Timor mortis conturbat me
42
Does the promisee’s motive matter?
 Williams v. Carwardine (p. 147)
 Restatement § 81
 And if this weren’t the case?
43
Re Greene
Where was the consideration?
44
Re Greene
Where was the consideration?
 What about the sexual services?
 As future services, were these tainted by
the doctrine of illegality
45
Re Greene
Where was the consideration?
 What about the sexual services?
 If future services these would be tainted
by the doctrine of illegality
 Is this simply the expression of a time-worn
archaic morality?
46
Re Greene
Where was the consideration?
 What about the sexual services?
 If future services these would be tainted
by the doctrine of illegality
 Is this simply the expression of a time-worn
archaic morality?
 What’s the difference between a contract for ex
ante services and palimony for past services?
47
Re Greene
Where was the consideration?
 What about the sexual services?
 If future services these would be tainted
by the doctrine of illegality
 Is this simply the expression of a time-worn
archaic morality?
 Is there something else going on?
48
Re Greene: Adequacy
 “for one dollar and other good and
valuable consideration”
 Why didn’t that work?
49
Re Greene
 “for one dollar and other good and
valuable consideration”
 Why didn’t that work?
 What if they had added “the receipt and
adequacy thereof is hereby
acknowledged”
 And provided a cheque for that amount?
50
Re Greene
 What about the fact that the contract
was under seal?
51
Schnell v. Nell (p. 146)
 A promise of $600 to honor wife’s
promise in will consideration of:
 Promise in will
 one cent
 love and affection for deceased wife
52
Schnell v. Nell (p. 146)
 A promise of $600 to honor wife’s
promise in will consideration of:
 Promise in will
 one cent
 love and affection for deceased wife
 What about the moral obligation to
honor his wife’s wishes?
 Causa vs. consideration
53
Batsakis
 Why did they
structure the contract
as a loan of $2,000
at 8 per cent?
Athens, April 27 1942
54
Batsakis 139
 Why did they structure the contract
as a loan of $2,000 at 8 per cent?
 Is there really a problem of adequacy
here?
55
Mutuality of Obligation
 Either both are bound or neither is
bound
 Sed qu. unilateral contracts
 See Restatement § 79: not a separate
requirement
56
George Mason School of Law
Contracts I
Promissory Estoppel
F.H. Buckley
fbuckley@gmu.edu
57