What are consideration substitutes?

In law school and on the Bar Exam, contract law is largely about identifying the required and essential parts of a contract so that you can argue whether a contract exists or not (and whether or not one or both of the parties are obligated to perform). This is why it is so important to be able to spot an offer, an acceptance, and consideration. On exams, it is common to encounter fact patterns where it appears as if one of the factors doesn't exist -- when, in fact, it does, you just need to be creative in arguing why it is present. Consideration substitutes are an example of such a scenario, where it may appear that no consideration is present, and thus no contract exists; however, a consideration substitute is present, which would satisfy the requirement.

One common substitute is a written promise to satisfy an obligation for which there is a legal defense. For example, where Bob owes Sam $1,000, and a legal action to collect the debt is barred by the Statute of Limitations, Bob may write Sam to say, "I know I owe you $1,000, but I will pay you $600." There is no new consideration, but Sam can enforce the promise to pay $600.

Another common example is promissory estoppel, which will be covered in other cards.