Agreements Lacking Consideration: Past Consideration and Moral Obligation - Discussions in Contracts Podcast
This podcast explains when agreements are not enforceable as contracts because they are not supported by consideration due to the fact that the promise is based on past action or a moral obligation. It also presents common situations involving past consideration, including the exception provided under the material benefit rule. The cases Mills v. Wyman and Webb v. McGowin are discussed.
On completion of the podcast, the student will be able to:
1. Explain that for there to be a contract, there must be consideration or another justification for enforcing the agreement.
2. Explain and apply the rule for bargained-for exchange.
3. Explain and apply the rule that promises that are based on a benefit previously received are not supported by consideration but are referred to as having “past consideration” or “moral obligation.”
4. Identify situations where there is no consideration because of the past nature of the benefit, but that the promise may nevertheless be enforceable under the material benefit rule where a promise is made after the promisee conferred a benefit on the promisor and it would be unjust not to enforce the promise.