Consideration Substitutes

Question 1

Consideration Substitutes

Answer 1

1. Promissory Estoppel
2. Old Debt
3. Voidable Duty
4. Material Benefit Rule
5. Quasi-Contract

Question 2

Promissory Estoppel

Answer 2

Under the doctrine of Promissory Estoppel, a promise unsupported by consideration may, nevertheless be enforceable if:

1. the promisor should reasonably expect it to induce action or forbearance on the part of the promisee or a third person;
2. the promise does, in fact, induce such action; and
3. injustice can be avoided only by enforcement.

In such cases, the remedy may be limited or adjusted as justice requires. Typically, courts will limit such awards to reliance damages.

Note: A majority of jurisdictions will apply the doctrine of promissory estoppel to enforce charitable subscriptions without requiring proof of actual reliance.

Question 3

Quasi-Contract

(Implied-in-Law)

Answer 3

If a contract fails or no contract exists, quasi contractual relief may be available if such failure or absence would result in the unjust enrichment of one of the parties. In order to recover in quasi-contract, the requesting party must prove that:

1. they conferred a benefit on the non-requesting party
2. such benefit was not intended as a gift
3. the other party agreed to accept the benefit, and
4. the requesting party had a reasonable expectation of being compensated.

Question 4

Moral Obligation and Subsequent Promise

Answer 4

Some jurisdictions will enforce a subsequent promise where the prior benefit was conferred as part of a moral benefit (incurred cost to save a life). Typically, enforcement is limited to reliance damages (costs).

Question 5

Material Benefit Rule

Answer 5

Under the Material Benefit Rule, when a party performs an unrequested service for another party that constitutes a material benefit, the modern trend permits the performing party to enforce a promise of payment made by the non-performing party after the service is rendered; but only to the extent necessary to prevent injustice (reliance: costs).

Question 6

Promise to Pay Old Debt

Answer 6

A new promise to pay a debt barred by the statute of limitations has run is enforceable witout any new consideration.