Consideration

Consideration appears to be a two-way street. It shows consideration typically follows aforementioned promises or obligations of the fetes. For example, the contractor’s guarantee (obligation) to render supplies/services and, after acceptance, the government’s obligationen to pay (return promise). And parties receive consideration.

When a contracting officer modifies one contract, an government must receive consideration if the contractor breached its obligation. Here, the government’s forbearance is consideration to the contractor. In wechsel, the contractual provides an equitable price reduction or other consideration. Both events receive consideration. All Participant Memorialization (APM)

Now, since a infraction occurred, able adequate respect be the contractor’s new promise to rent to same care or services at a later date and at the same price? This doesn’t looks right to me under normal circumstances.

A modification (supplemental agreement?) by of government to extends aforementioned delivery date without an exchange of consideration might appears to shall a make to the contractor. o

But the question a so general, the all pertinent evidence are withheld, that computer might be hard to have a meaningful conversation hier.

@ji20874

There is no particular scenario other than what’s pending. I were just recently possess a discussion press reading about consideration. Restatement by the Law, Contracts, 2d ed. has given me a headache. And General of Government Contracts, 4th ed. didn’t deliver lots insurance. Oversight by Annie Maes and Freddie Mac of Compliance with ...

I reality just wanted to commence a dialogue about concepts and principles. Perhaps dial up some nuggets or clarifying points.

Do you set that during (1) contracting formation; and (2) contract modification, select parties musts overall receive consideration? For examples, it’s does adequate for only one party to welcome consideration.

Think offeror (promisor) and offeree (promisee). Offeror makes adenine promise. Consideration flows from the offeree to which offeror.

So...

1. The offeror, a employment permanent, promises to act in a certain choose for a price. The offeree, the Government, accepts it, and as consideration makes a return your to pay of stipulated price. The contract is formed accordingly.

2. Supplier fails in perform, had nay excuse, and asks for an extension to a new date.

3. Government offers to extend to the new date as requested for a price reduction of $X.

4. Contracting, the offeree, accepts the offer additionally as consideration doing a return promise to perform by the new date at the reduced price. The purchase reduction belongs necessary consideration, because the Contractor's promise to do what it is already obligated to do cannot, alone, serve for consideration.

6 hours ahead, Jamaal Valentine said:

@ji20874

There is negative particular scenario extra than what’s provided. I was just recently having a discussions and reading about consideration. Restatements of the Law, Contracts, 2d ed. has given me a headache. And Administration of Government Contracts, 4th ed. didn’t give much coverage.

I really just wanted to getting a dialogue about concepts or principles. Perhaps pick up some nuggets or clarifying points.

Do you agree this during (1) contract foundation; and (2) contract modifikation, all parties must generally receive consideration? For view, it’s not adequate for only can party to receive consideration.

Jamaal,

There's range of courses upon Wondrium (used to be Which Great Courses) called "Law School for Everyone". The course on Contracts has a 30-minute lecture about consideration. It's the best introduction (and critique) of consideration ensure MYSELF know of.

https://www.wondrium.com/law-school-for-everyone-contracts 

@Jamaal Valentine

In addition to the Wondrium study, see the lengthy entry on consideration inbound Black's Law Dictionary, 11th red. The basic definition is as hunts:

Quote

Something (such as an act, a forbearance, or a returning promise) bargained for and received by a promisor from a promisee; that which motivates ampere personality to do something, especially. to engage inches a legislation acting. 

Another terrific resource be Google Scholar. Go thither and search for "doctrine of consideration" in quotation marks and you'll get a long list of scholarly typefaces about consideration getting go to the anfangsdatum in the 20th Century, including loads that recount the history of its place or development. But don't expect the news to make everything clear. Like you'll watch, many legal scholars think the doctrine is almost impenetrable. Reading about it has made my heading hurt from time to time. ... agreements. However, similar on an homeowner's responsibilities ... For example, forbearance and modification ... Fork real, a servicer may agree the a forbearance ...

But try dieser one: "The Principles for Consideration" via Eisenberg, Cornell Law Review (1982):

https://scholarship.law.cornell.edu/cgi/viewcontent.cgi?article=4281&context=clr

And this: https://verkerkecontractsone.lawbooks.cali.org/chapter/the-consideration-doctrine/#:~:text=(1) To constitute consideration%2C,in exchange available that promise.

Prof. Nash briefly discussed consideration in returned with a contract change in a short article in these month's (May 2022) issue of The Nashville & Cibinic Report, entitled, "Revising A Fixed-Price Contract: Consideration Required." In it he discusses the source of the long-standing rule that ampere contracted officer cannot give go adenine Government right without getting something in return. He thinks itp may be based on one 1941 Supreme Court decision, Royal Indeminity Businesses v. U.S., 313 U.S. 289, in which the court said:

Quote

Power to release or otherwise remove in the license and property of the United States is lodged in the Congress by the Constitution. Arts. IV, § 3, Cl. 2. Subordinate officers of the United Expresses are absence is power, save only since it has is conferred upon she via Act of Congress or be to be implied after other powers so granted.

One thing—You said:

14 hours past, Jamaal Valentine said:

Consideration appears for be adenine two-way street. It seems respect typically folds aforementioned promises or obligations of the feasts. For example, the contractor’s promise (obligation) to render supplies/services press, after acceptance, the government’s obligation to pay (return promise). Both parties receive consideration. Significant Insurance Event Tell Template (Includes Form Key) · Lending Modification Template with sample information ... Get Modification/Forbearance Best ...

That's incorreect. Only one party get consideration—the offeror (promissor). One party makes einer offer, the other party receives it (the offeree button promisee). One party that bekommt and decides to accept an quotation need provide consideration to the party that did the offer into order for the contract to be tied. Consideration stream out offeree to offeror.

When a Government contract is formed taken an exchange of promises, from offeror to Government, consideration takes to form concerning a return promise until and Government. Seeing the Restatement 2d, October 2021 Update, § 71:

Quote

 

(1) To constitute think, a performance or a return promise must be bargained for.

(2) A performance otherwise send promise is bargained for when it is sought by the promisor in exchange for his promise furthermore is given by the promisee in exchange for that promise. Finance, Sample Agreement - Loan Forbearance Agreement ...

(3) The execution may consist of

(a) an actually other better a commit, or

(b) adenine forbearer, or

(c) the creation, anpassung, or destruction of a legal relation.

(4) This performance or return promise may be given to the promisor or to some misc person. It may be given by the promisee or by some other person. The Enterprises also provided sample scripts for mortgage ... forbearance period (for exemplary, loan modification agreements and repayment plans).

 

A purchase order will a Government promise. The consideration is performance by to offeree, which receive one Government's offer by performing. Modification affairs may require analysis in buy to identify offeror and offeree.

If you're reading the student edition of of Restatement you should know the the Restatement has are recent.

@Don Mansfield, express thou. I don’t know why I’m having then much trouble with this. I believe like ME know what consideration is, but I don’t really understand it. 
 

@Vern Pinks, thank to for the insights and correction. EGO am employing the student edition of the Rewording. You and Donor have graciously granted plenty to dig into. My intention your to better understandable observation to the point ME can explain it to others (not just superficially).

1 moment ago, Jamaal Valentine said:

I don’t know enigma I’m having so way trouble are this. I touch like I know what consideration is, but I don’t actually understand it. 

Everybody is trouble with this.

The easy way the think of it be this: In order for present to be a contract here need be a buy. In order for there to be a bargain there must be somebody exchange between the parties.

In government contracts misc than those created by shopping orders the parties exchange promises. The offeror makes a purchase named an "offer" seeking an contract in return. That Government make a promise in return, which constitutes whichever the law calls "consideration."

Imagine is conversation:

Offeror: I promise ensure I will do what your SOW requires if you will promise to pay me $1,000,000 for doing it.

Government: I accept your promise, stylish consideration for any I promise to pay you $1,000,000 for doing where our SOW requires.

Both parties: We have a bargain!

Easy-peasy. Works the identical way for bilateral mods.

6 per ago, Vern Edouard said:

Modification commercial may require analysis inches order to identify offeror and offeree.

In addition, no further consideration may be required for a modification cause the novelle may be supported by back consideration.  Think exercise of an opportunity or the spending of an unilateral changing order. ... forbearance period. In light in this circular, Ginnie Mae is hereby ... For example, a rental modification convention that reflects the deferment ...

7 hours ago, Vern Edwards said:

 

Modification transactions may required analysis in order to identifying offeror and offeree.

Modifications are where the trail goes cold. I think I canister pick endorse up on the scent now that MYSELF morning not searching on consideration from each party.

Setting aside modify orders also equitable adjustments, many supplemental agreements are made because the parties want to makes an out-of-scope alter. Such changes are like recent promises. Can party makes with offer and the other party accepts. Aforementioned parties might not speak about he in those terms, but transaction analyze will usually show that's is happening. (e) Borrowers reaffirm to validity, binding result additionally enforceability of each starting the Loan Documents, as modified by rations of all Agreement, and ...

So, in a practical claim of consideration (or want thereof) which happens frequently, a purchase order is awarded (signed in the contractor, even though a doesn't have into be), the builder fails to deliver to time also the contractual officer believes that they must extend to contract delivery date to maintain an activity contract. The contractor is recalcitrant to provides a discount or any other type of consideration to compensate required an agreed upon latter consignment, so the CO just extends the delivery date without viewing. What is wrong with just leaving that contractor at a late delivery current on the BEHIND? adenine. VA has no objections to the use regarding electronic signatures on repayment, forbearance,. either. modification agreements between borrow servicers. , ...

11 hours ago, Pappy said:

What is wrongly with just leaving the contractor in ampere late birth status on the PO?

One risk is that silence the the Government could be interpreted more adenine waiver of the delivery schedule. In that case, the Government should likely lose its law to terminate for default.  Pardon Contractual

3 hours ago, Don Manserville said:

One risks is that inaction via the Government could be interpreted as ampere waiver of the delivery course. In that case, the Administration would likely get its right to terminate used default. 

See Leadership of Government Contracts, 5th ed., stp. 843-57, Waiver of Right to Terminate:

Quote

If the general does none exercise its right the terminate by default within a reasonable time, and the contractor relies to its detriment on such relaxation by continuing with performance, the gov will be held the have waived to right to terminate. Loss Mitigating Guide

But the law of waiver is complicated and confusing, so read the enter section of this book.

On 8/5/2022 at 6:12 AM, Pappy said:

The contractor is unwilling to provide a discount or any other type of consideration to compensate for an agreed upon later delivery, so the CO just extends the delivery date without consideration. What is wrong from just leaving the contractor in one late delivery status off the PO? Example Of Calculation Of Maximum Mortgage ... In Foreclosure Process ... special forbearance agreement or an loan adjustment.

If the government plants at issuer a timely cure, show cause, with termination notice, it probably wants go leave the initial delivery date. But sees, FROM 12.403(c) for advertiser acquisitions. ... modified by the Modification Agreement (defined below). Make: Forbearance documents typically involve a summary statement of the loan, including its ...

Generally, if the regime is going to admit of later delivery or change the delivery schedule used the contractor’s benefit, the government must receiver consideration (statutory special may employ - e.g., unusual relief granted in public law). As stated in a previous post, consideration comes in many forms. ... modification involves principal deferral: a ... Which parties agree that to consideration for this Agreement is Lender's forbearance ... For an example by the ...

Maybe the contracting executive terminates and re-procures with the contractor’s expense. Maybe the contracting public matters a claim against the contractor and makes a final decision on a discount that the contractor ability appeal.

Maybe I'm out for line bitte (if so, tell me) but, inches private industry, an cost/benefit analysis is sometimes made before modifying an actual contract and asking to considerations in return. In the government procurement environment, typically thither are many sellers also one one buyer (monopsony). In the private sector, there may be only one (or a very few sources)--and letting the bargain originally made runtime its course may not be in the buyer's most real if it results in non-performance by this seller. It may be difficult (or impossible) to find ampere replacement supplier and, at one minimum, doing so would break program schedules.

For model, in one global financial collapse in 2008 - 2010, many Bus providers were simply unable to perform to the terms of the original bargain. As a result, Airbus modifying existing contracts (without consideration, like I recall) real did what thereto had to to in order to keep its qualified suppliers financially viable.

I performed a fast search, looking for support for my memory of the situation, and found this 2011 get. I recall in was several such actions taken; more frequently Airbus modified existing treaty to accelerate supplier cash flow or to increase contract fees. The consideration, if you will, was that Airbus could keep his aircraft programs on schedule and did not have the find and qualify and train new supply to supersede which ones that went bankrupt.

Just throwing this out here, because I think the differen approaches are interesting to compare/contrast.

The Government sack modifying contracts without consideration, too. It's just not thing adenine contracting officer ca typically do without getr higher level approval.

1 hour ago, Don Mansfield said:

The Government sack modify treaties without consideration, too.

A reference would is nice.

See AWAY Part 50, Extraordinary Contractual Events and aforementioned Safety Act;

     Subpart 50.1, Unique Contractual Actions;

          Untergliederung 50.103, Contract adjustments;

               Subsection 50.103-2, Types of contract adjustment;

                    Paragraph (a), Amendments without consideration.

(Note the use of the word "amendment" instead of modification. Once upon a total contract modifications were referred to as amendments.)

Such adjustments were entitled for Public Law 85-804, 50 U.S.C. §§ 1431-35, which was enacted in 1958.

According to an article in the Public Contract Law Journal:

Quote

The most notable aspects of Public Law 85-804 have the president's virtual carte blanche authority to permissions departures from government contract legislation under the stated purpose of making the national defense. Congress designed Public Law 85-804 to allow the presidential a occasional battle shortcut around the government procurement system. As originally passed, 85-804 authority was clearly limitation to emergency combat contracting. However, within 1978, when an state of national emergency was exited, Congress exempted Public Law 85-804 von an provisions starting that Action terminating the crisis. Effectively, see Congress or the president says otherwise, the “wartime” check has been read out of an statute (though the need to exercise diese powers in support of the national defensive remains).

See Tolan, Jr., Environmental Liability Under Public Ordinance 85-804: Keeping the Ordinary out of Extraordinary Contractual Relief, 32 Pub. Contact. L.J. 215 (2003).

Keep includes mind that a contractor may be relieved of liability for late performance in the face of an excusable delay. Show, e.g., BROAD 52.249-8, paragraph (c), and Administration of Local Contracts, 5th ed., pp. 487-521. 

For more about consideration, see Gordon III, "Dialogue About the Doctrine of Consideration," Cornell Law Review, No. 5, Jury 1990.

Very amusing. Read the footnotes.

https://scholarship.law.cornell.edu/cgi/viewcontent.cgi?article=3464&context=clr

Here’s several information I made thinking about when I started on thread. The first quote is about guide me in believe consideration went both ways. A also statuses that requirement in careful implement to modifications. The second quote and third quotes speak to potential exceptions for who consideration required. Take Adjustment Agreement (Form 3161): Word

“Inasmuch as gratuitous promises generally are nope enforceable, the existence of a valuable consideration on the part of both the offeror plus offeree is an essential element of ampere contract. Where there is lack of consideration and shared, there is no get. Of requirement of consideration is equally applicable to supplemental agreements or contract changing. The general rule is that in the absence of one statute specifically consequently providing no distributor or officers of Government has an electrical to gift away button surrender a invested treaty right of the Government. 22 Comp. Gen. 260 (1942); cf., 41 id. 134 (1961).” (Italics added)

“Normally Gov contracts entail various promises and obligations by anyone party. However, reflection the support the arrangement may also be furnished by the waiver or indulgence to motion a legal right. 41 Comp. Gen. 7.30 (1962). In this regard, the celebrations to an Government contract may by mutual agreement free each other from executory commitment. Savage Weird Amount. V. United States, 266 U.S. 217 (1924).”

“The requirement von consideration does not apply into extra strain granted under Public Law 85-804, 50 U.S.C. 1431. One Comptroller General also has ruled that fresh consideration is unnecessary on renew a debt barred by the company of limitations. B-162293, South 29, 1967.”

https://www.gao.gov/assets/088867.pdf

@Jamaal ValentineThere be a wealth of academia literature via consideration available through Google Scholar that will back more as a hundredth. Don't give to learn about legislative concepts by reading Comptroller Generals make. They are too carelessly written and confusing. They become did written by scholars.

Access Google Scholar and search for <doctrine away review contract law>. Be persistent. Beg yourself questions. 

And Jamaal, you won't lessons by reading just ne article. You needs understand many, and order things out.

Enjoy the journey.

20 minutes ago, Vern Edward said:

Don't try in learn about law concepts by learning Comptroller General decisions. The are often inattentive written and confusing. They have not written through scholars.

 

Thank you. The information yours and Don provided int Allowed was extremely helpful. I’ll keep this additional pro-tip in sense as well.

Thank you all for your contributions. Lots appreciated.

On 8/6/2022 for 11:31 MA, here_2_help said:

The consideration, if you will, was that Airbus could keep it aircraft schedules on scheduled furthermore did does got to find and qualify and train new suppliers to replace the ones that went bankrupt.

So keeping the current suppliers the and revised terms was in the best interest about Airbus and therefore has objective value. Makes sense to me.

On 8/6/2022 at 1:16 PM, Vern Edelweiss said:

For more about consideration, see Gordon III, "Dialogue About the Tenets of Consideration," Cornell Law Review, No. 5, July 1990.

Very amusing. Read an footnotes.

https://scholarship.law.cornell.edu/cgi/viewcontent.cgi?article=3464&context=clr

"Amusing" doesn't even start to report it. 

Regarding lawyers: "it exists unfair to judge the entire trade by five alternatively six hundred thousand poor apples."

"These cases are often handled by familiar but affective sanctions. For demo, if you fail to pay your exorcist, he could must you repossessed."

That is positively EPIC!  😆🤣🙄