Does a promise to forbear from exercising a legal right constitute legal consideration in a settlement?

California, United States of America


The following excerpt is from Armstrong World Industries, Inc., v. Superior Court, 215 Cal.App.3d 951, 264 Cal.Rptr. 39 (Cal. App. 1989):

This is a sophistic argument. The subject settlement was entered into when petitioner had the legal right as prevailing party to seek a costs award. The consideration given by petitioner was its promise to forbear from exercising its legal right to seek costs (not to forbear from enforcing a costs award). Such a promise to forbear from exercising a legal right is legal consideration supporting a contract. (Healy v. Brewster, supra, 251 [215 Cal.App.3d 959] Cal.App.2d at p. 551, 59 Cal.Rptr. 752.) The implicit false premise in real parties' argument is that the sufficiency of a promise to forbear as legal consideration is to be evaluated not at the time of the contract but in the future when the underlying right lapses by reason of the failure to have exercised it.

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