I am so confused about this topic, when is forbearance to sue a valid consideration and when it is not?

Please please if anybody can explain.

Thanks in advance.

To have a valid contract, you need offer-consideration-acceptance. Consideration is the bargained for exchange. Typically we think of consideration as you give me an apple, and I will give you money. However, consideration can get more sophisticated than that, as you know. One way that you can have consideration is by saying that you won't do something. I will give you this apple if you agree not to sue me. (silly example) but agreeing NOT to sue somebody is what is forbearance. Forbearance is a consideration substitute, it is essentially the same as agreeing to do something as consideration (pay money) but as soon as you agree NOT to do something, you also have consideration.

So to answer your question, anytime you have forbearance to sue, you can see if it meets the obligation for contract consideration. Did someone make you an offer, and did you give valid consideration by agreeing NOT to do something.

Oh, but the trick you'll see on the bar exam is that forebearing to sue when no legal right to sue existed is NOT valid consideration.

I will give you an apple if you agree not to sue me for a breach of contract that occurred beyond the statute of limitations. On the other hand, many will argue that you still have the RIGHT to sue, and using the SOL is merely a defense to that cause of action. Hmmm, I feel a MBE question right around the corner.

Watch for whether the person agreeing for forebear an action had a valid cause of action to begin with. If not, there's no consideration and the contract fails for lack of valid consideration.

It will be interesting to hear the banter over the SOL example above. Care to opine?

just reviewed this today in "strategies and statistics" book, pmbr also supplements this topic

A good faith belief in the validity of a legal claim to sue, even if claim turns out to be valueless IS sufficient consideration.
It is the claimant's good faith belief that is most important.

put another way.
a promise not to pursue a valid debt/sue for that debt that P thinks he is owed, is legally sufficient consideration to support a return prommise if the debt is either reasonable or objectively unreasonable BUT claimed in good faith.

give you an example
where X was told by her lawyer "your claim is doubtful" surrender of that claim /forbearance is STILL valid IF
(1) the claim is in fact doubtful bc of uncertainty as to facts of law
OR
(2) surrendering party** believes in good faith that the claim is valid

an INVALID CLAIM can still be consideration if
(1) reasonable person could believe the claim is well-founded
(2) pursued in good faith by claimant

remember it is the claimant's state of mind that is most important, if the claimant knows the claim is bogus, then there is no consideration

in "strategies & tactics" by emanuel they have a paragraph about this topic in intro to contracts section.
as far as the MBE i found this book extremely helpful because it just gives you tips that are all over the MBE.

For it to be a consideration, the person agreeing to forebear the action does not have to have a valid claim, all that is required is a good faith belief that his claim is reasonable, and not frivolous or vexatious.

also, i just quoted two MBE ques above with what i posted, so hope that is helpful (pmbr one and one frat strategies book)

however, jeff's ques regarding sol would be perfect for an essay. but i dont think you will see it on the MBE, MBE rule is the one i posted.
as far as the essay...
hypothetical

if there is a SOL issue, see if any of the SOL tolling provisions apply:
i.e.
(1) toll for D's absence
(2) P infancy or insanity
(3) tolls for death

or use this "LEAPDADCAT" for tolling provisions of SOL
L - parties lengthen the SOL
E - equitable estoppel preventing D from asserting SOL (this would work in Jeff's example i think,
A- written acknowledgment of old debt
P - part payment of old debt
D - disability of P
A - amending a pleading to add time barred claim
D - death of party
S -service members civil relief act
C - time barred counter claim
A - arising outside NY where personal jurisdiction cannot be obtained in NY court
T - termination (not on the merits) & recommencing same action after SOL has expired

at of all of the above, if K is past SOL (6 yrs in NY) could try to argue for equitable estoppel ,
another tactic, i dont know if remedy in equity court: quasi K or promissory estoppel theory may work - not sure if SOL there

also - if there is any kind of fraud or misrepresentation in the K *** then claimant is covered bc P may either sue within 6 years of the fraud or date of breach OR P may sue 2 years from DISCOVERY of the fraud


(seriously, i need to get a life..., well this was a welcome break from torts review)

Just my two cents...

The standard here is a subjective one (i.e. a good faith belief in the claim), rather than an objective one. However, if the facts would make such a belief patently unreasonable, I would at least attempt to argue that the forebearor did not have the required subjective good faith belief (absent explicit evidence to the contrary, anyway).