It is important to note that the promisor obtains an advantage when there is performance of a contract, making it a valid consideration. However, if there is the fulfilment of a precondition, it means that there is no benefit to the promisor and there is no quid pro quo. An agreement between private parties that creates legally enforceable mutual obligations. The basic elements required for the agreement to be a legally binding contract are: mutual consent, expressed by a valid offer and acceptance; reasonable consideration; Capacity; and legality. In some States, the consideration element may be met by a valid substitute. The remedies available in the event of breach of contract are general damages, consequential damages, damages of trust and certain services. Timko was a member of the board of trustees of a school. He recommended that the school buy a building for a substantial sum of money and, in order to get councillors to vote in favour of the purchase, he promised to help with the purchase and pay the purchase price less the down payment after five years. After four years, Timko died. The school continued his succession, which defended itself on the grounds that there was no quid pro quo for the promise. Timko was promised or received nothing in return, and the purchase of the property was not directly beneficial to him (which would have made the promise enforceable as a unilateral contract). The court ruled that Timko`s estate was liable under the three-part promissory note stubble test. Estate of Timko v.
Oral Roberts Evangelistic Assn., 215 N.W.2d 750 (Mich. App. 1974). To repay the liquidated debt of $8,000 to the surgeon, the patient sends a cheque for $6,000 that says “full payment.” The surgeon retrieves it. There is no dispute. Can the surgeon sue for the remaining $2,000? This seems to be an agreement: by cashing the cheque, the surgeon seems to agree with the patient to accept the full payment of $6,000. But there is a lack of consideration. Since the surgeon owes more than the nominal amount of the cheque, he does not cause any legal disadvantage to the patient by accepting the cheque. If the rule were different, debtors could easily induce creditors in difficulty to accept less than the amount owed by providing liquidity immediately. The key to the applicability of a “full payment” legend is the nature of the debt.
If it is not liquidated or there is a dispute, “full payment” can serve as agreement and satisfaction if it is written on a cheque accepted for payment by a creditor. But if the debt is liquidated and not contested, there is no consideration if the check is for a smaller amount. (However, it can be argued that if the audit is considered an agreement to amend a contract of sale, no consideration is required under Article 2-209 of the Uniform Commercial Code (UCC).) Past considerations are not considerations. Basically, this means that a person cannot promise anything to anyone in exchange for something the promisor has already received. For example, if Tom agrees to pay Sally $500 a week for 10 years of work after the work is finished, then the benefit to the promisor is already preserved. And the promised promise will only take place after the benefits have already been received, which means that no real exchange has taken place. It is true that [the franchisee] does not promise in so many words that it will make reasonable efforts to place the defendant`s notes and market its designs. However, we believe that such a promise may rightly be implied. The law has passed its primitive stage of formalism, when the exact word was the sovereign talisman and every slippage was fatal.
Today, it takes a broader perspective. A promise can be missing, and yet all writing can be “instinct with obligation”, imperfectly expressed. His promise to pay the defendant half of the profits and revenues from the exclusive representation and to report them monthly was a promise to make reasonable efforts to generate profits and revenues. Otis F. Wood v. Lucy, Lady Duff-Gordon, 118 N.E. 214 (1917). An example of stopping promissory notes could be used in the event that an employer verbally promises an employee to pay a certain monthly or annual amount throughout retirement. If the employee subsequently retires because he or she relies on the employer`s promise, the employer could be legally prevented from not honouring his or her promise to pay the reported pension payments. Cases involving pledges of charitable donations have long been problematic for the courts. Recognizing the need for such promises for charitable institutions, the courts have also pointed out that a mere promise of money to the general funds of a hospital, university or similar institution does not normally give rise to substantial action, but is simply a promise without consideration. If the promise prompts a non-profit organization to act, a stop of promissory notes is available as a remedy.
In about a quarter of states, there is another doctrine for cases involving simple promises: the theory of “mutual promises,” in which the promises of many individuals are taken in exchange for each other and bind each promisor. This theory was not available to the applicant in the Timko case because it was the only promise. We have examined the meaning of this prohibition sentence in Chapter 8 “Introduction to Contract Law” (recall the English case of High Trees). This is another kind of promise that the courts will implement without anything in return. Simply put, promissory estoppel to be prohibited, to refuse a promise if someone else has relied on it later.