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Lesson 8-1 Types of Consideration

LESSON 8-1 OUTLINE I. Consideration A. Act, Forbearance, or Promise B. Trading C. Legal Value D. Adequacy of Consideration E. Nominal Consideration

Lesson 8-1 Review

Vocabulary Review
Define the following vocabulary terms.

1. consideration That which is given or received in a contract.

2. gift The transfer of ownership without receiving anything in return.

3. donor The person giving a gift.

4. donee The person receiving a gift.

5. forbearance A promise to not do something.

6. promisor The person who promises an action or forbearance.

7. promisee The person to whom a promise is made.

Concept Review

8. Define consideration.

Consideration is what a person demands and generally must receive in order to make his or her promise legally binding.

Lesson 8-1 Review (continued)

9. How can legal value be found in the exchange of benefit for a detriment?

With legal value, the detriment is the giving up of a legal right. A detriment arises when a person promise forbearance.

10. Under what conditions is there no consideration?

There is no consideration if one of the parties does not give an act, forbearance, or promise to the other, if one of the parties does not trade her or his contribution to the transaction, or if what is traded has no legal value.

11. What is adequacy of consideration?

The values that different people place on similar property could vary widely. What one person will pay for an item or service, another person may feel is unreasonable and never consider paying.

Goals Review

12. What are the three requirements of consideration?

The three requirements of consideration are: (1) each party must give an act, forbearance, or promise to the other; (2) each party must trade what he or she

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