Formation: Promises Binding Without Consideration

Question 1

Four Types of Promises Binding Without Consideration

Answer 1

1. Pay a Debt Barred by the Statute of Limitations
2. Perform Voidable Duty
3. Material Benefit Rule
4. Promissory Estoppel

Question 2

Definition: Pay a Debt Barred by the Statute of Limitations

Answer 2

New promise to pay debt after the statute of limitations has run is enforceable without new consideration.

Question 3

Definition: Perform Voidable Duty

Answer 3

New promise to perform voidable duty is enforceable if it doesn’t suffer from an infirmity rendering it voidable.

Question 4

Definition: Material Benefit Rule

Answer 4

When a party performs an unrequested service for another party, the modern trend permits the performing party to enforce the promise of payment for material benefits received to extent necessary to prevent injustice (unless donative intent).

Question 5

True or False: Promissory Estoppel is not a substitute for consideration.

Answer 5

False.

Question 6

Promissory Estoppel: When Is A Promise Binding? (3 Elements)

Answer 6

1. Promisor should reasonably expect it to induce action on the part of the promisee or a third person;
2. Promise does induce such action; and
3. Injustice is only avoided by enforcement of the promise.