Consideration and Promissory Estoppel: every key term you need (+ practice quiz)
25 flashcard terms for Contracts Topic 2, written to match the course framework. Study them here, then drill them as interactive flashcards, or test yourself with the 15-question quiz — free, no account needed.
A performance or return promise that is bargained for, meaning the promisor sought it in exchange for the promise and the promisee gave it in exchange for that promise.
Bargained-for exchange
The reciprocal inducement test: each side's promise or performance must be the price of the other, distinguishing a bargain from a gift wrapped in conditional language.
Legal detriment
Doing something one is not legally bound to do, or forbearing from something one is legally free to do; economic loss is not required for the detriment to count.
Hamer v. Sidway
An uncle's promise to pay a nephew for abstaining from tobacco and drinking was enforceable because giving up lawful freedoms is a legal detriment even if it also benefits the promisee.
Conditional gift
A promise whose stated condition merely enables the donee to receive a gift rather than being sought in exchange, which leaves the promise unsupported by consideration.
Adequacy of consideration
Courts do not police the fairness of the exchange; even a nominal or unequal price suffices unless the disparity signals fraud, duress, or a sham recital of payment.
Sham consideration
A recited but never paid and never intended payment that a court disregards, treating the promise as gratuitous notwithstanding the formal language of exchange.
Past consideration
A performance already rendered before the promise, which cannot be bargained for and therefore does not support enforcement under the traditional rule.
Material benefit rule
A minority approach enforcing a later promise to pay for a benefit previously conferred, to the extent needed to prevent injustice, when the benefit was not intended as a gift.
Webb v. McGowin
A worker who was maimed diverting a falling block from his employer could enforce the employer's later promise of lifetime payments under the material benefit approach.
Mills v. Wyman
A father's promise to pay for care already given to his adult son was unenforceable because the care preceded the promise and rested only on moral obligation.
Illusory promise
Language that reserves so much freedom that the speaker undertakes nothing, such as a promise to buy only if the buyer feels like buying, which cannot be consideration.
Wood v. Lucy, Lady Duff-Gordon
An exclusive agency was saved by implying a duty of reasonable efforts, so the agent's obligation was real and the promise was not illusory.
Satisfaction clause
A promise conditioned on the promisor's approval remains enforceable because approval must be honest, and in commercial quality cases must also be objectively reasonable.
Requirements contract
A buyer's promise to purchase all it needs from one seller is supported by consideration because good faith limits the quantity to actual, non-disproportionate needs.
Pre-existing duty rule
A promise to do what one is already legally bound to do is not consideration, so a one-sided modification extracted mid-performance is traditionally unenforceable.
Alaska Packers Association v. Domenico
Sailors who demanded higher pay mid-voyage could not enforce the new terms, since they promised only the work their existing contract already required of them.
Accord and satisfaction
A new agreement to accept a different performance in settlement, which discharges the original duty only once the substituted performance is actually rendered.
Settlement of a disputed claim
Forbearance from asserting a claim is consideration if the claim is doubtful or the claimant honestly and reasonably believes it is valid, even if it would ultimately fail.
Promissory estoppel
A doctrine enforcing a promise that the promisor should expect to induce reliance, that does induce definite and substantial reliance, where injustice can be avoided only by enforcement.
Ricketts v. Scothorn
A grandfather's note enabling a granddaughter to quit her job was enforced on reliance grounds despite the absence of any bargained-for exchange.
Feinberg v. Pfeiffer Co.
A pension promise became enforceable when a long-serving employee retired in reliance on it, illustrating reliance substituting for consideration.
Drennan v. Star Paving Co.
A subcontractor's bid was held irrevocable once the general contractor reasonably relied on it in submitting its own bid, applying reliance to sub-bidding.
Reliance damages
A remedy restoring the injured party to its position before the promise by reimbursing expenditures made in reliance, often the measure where estoppel supplies enforcement.
Promise to pay a barred debt
A new written promise to pay a debt barred by the limitations period or discharged in bankruptcy is enforceable without fresh consideration, to the extent of its terms.