This chapter explains why a promise is generally enforceable only when supported by bargained-for exchange rather than mere gratuity. The Dragon’s Hoard highlights the difference between genuine exchange and the illusion of value that often surrounds dramatic promises.
Doctrinal map
R2d § 71’s bargained-for-exchange test is the chapter’s central engine. The student should be able to apply it cleanly. Two cases anchor the doctrine. Hamer v. Sidway shows that forbearance from a legal right counts as consideration even when the promisor gains nothing tangible. Pennsy Supply v. American Ash shows that avoidance of a burden by the promisor can be consideration even when the promisee receives the ‘free’ item. Adequacy is not the question; structure of exchange is.
Key Sources
Key Rules
- R2d § 71: Consideration = bargained-for performance or return promise
- R2d § 79: Adequacy not required — peppercorn suffices
- Pre-existing duty rule: doing what you're already obligated to do is not consideration
Cases
- Hamer v. Sidway 124 N.Y. 538, 27 N.E. 256 (1891) Forbearance from the exercise of a legal right is sufficient consideration, even if the promisor receives no economic benefit. Consideration looks to the promisee's detriment as much as to the promisor's gain.
- Pennsy Supply, Inc. v. American Ash Recycling Corp. 895 A.2d 595 (Pa. Super. Ct. 2006) A promisor's avoidance of a cost or burden can be consideration. When a promisee accepts a 'free' material at the promisor's invitation, and the promisor thereby escapes a disposal obligation, the transaction is a bargain, not a conditional gift.