Term
| True or false: To have a bargained-for exchange, each party's manifested motive must primarily be an exchange motive. |
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Definition
| False. It need only be part of each party's manifested motive. The primary manifested motive can even be a gift motive. |
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Term
| Is there consideration if one of the parties' manifested motive for the exchange is part bargain, part gift? |
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Definition
| Yes. There is still consideration even if manifested motive is primarily a gift motive. |
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Term
| An offeree who has accepted an offer will be presumed to have been motivated, at least in part, to obtain the offeror's promised performance unless what? |
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Definition
| At the time of manifesting assent, the offeree clearly manifested an intention to act solely for other purposes. |
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Term
| What is the peppercorn theory of consideration? |
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Definition
| If a bargained-for exchange exists, there is no additional requirement for purposes of establishing consideration that what either party received in the exchange is "adequate" for what the party gave up. |
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Term
| True or false: A single promise may be consideration for any number of promises by the other party. |
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Definition
| True. This follows from the peppercorn theory of consideration. |
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Term
| What is the sham-exchange doctrine? |
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Definition
| A pretense of an exchange, including a false recital of consideration, is not consideration. |
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Term
| Does a sealed promise that is delivered create a rebuttable presumption it was given for consideration? |
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Definition
| Not under the majority rule; only under the minority rule. |
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Term
| Does a written promise create a rebuttable presumption it was given for consideration? |
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Definition
| Not under the majority rule; only under the minority rule. |
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Term
| If the parties each manifest at least a partial bargain motive, will there still be consideration if one of the parties would have performed even if he or she did not receive anything in exchange? |
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Definition
| Yes, there is still consideration, even if the party admits after formation that he or she would have performed if there had been no exchange. |
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Term
| What test is used to determine if each party had at least a partial bargain motive? |
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Definition
| The objective theory of contract. |
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Term
| Is there consideration if the promisee knows that no part of the promisor's motive is to obtain what the promisee is giving? |
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Definition
| No, there would not be consideration for the promisor's promise in that situation. The objective theory of contract would not apply because there would be no misunderstanding regarding the promisor's motive. |
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Term
| Where does the phrase "peppercorn theory of consideration" come from? |
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Definition
| The idea that even something with as little value as a peppercorn can be consideration, provided it is bargained for. |
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Term
| What is sham consideration? |
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Definition
| Something given in exchange to create the false appearance of a bargain. Sham consideration is not consideration. |
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Term
| What are other names for sham consideration? |
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Definition
| Token consideration and nominal consideration. |
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Term
| What is the distinction between a want or lack of consideration and a failure of consideration? |
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Definition
| A want or lack of consideration refers to a true lack of consideration, meaning no contract forms. A failure of consideration means there has been a failure of performance after contract formation, and does not prevent the formation of a contract. Because consideration is a formation doctrine, it is better to refer to a "failure of consideration" as a "non-performance." |
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Term
| Will mere inadequacy of consideration prevent the formation of a contract? |
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Definition
| No, as long as the exchange was bargained-for. |
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Term
| Will stating in a written agreement that it is supported by consideration mean it is, in fact, supported by consideration? |
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Definition
| No. The court will determine whether there actually is consideration. This follows from the sham-consideration doctrine. |
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Term
| Will an agreement be legally binding simply because the parties intend it to be legally binding? |
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Definition
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Term
| Is "meritorious consideration" in fact consideration? |
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Definition
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Term
| What is "meritorious consideration"? |
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Definition
| Natural love and affection or a moral duty that induces a promise; it is not in fact consideration. |
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Term
| In a bilateral contract, what is the consideration? |
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Definition
| The exchange of promises. The consideration is not the performance of the promises. |
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