The concept of consideration in contract law includes

What is the consideration of a contract? How much is a licensing contract? In the legal system, the term consideration in contract law refers to something of value given to someone in return for goods , services , or some other promise. A valid contract must include consideration for every party involved.

In simple terms, consideration is the basic reason a party enters into a legal contract.

To explore this concept, consider the following consideration definition. See full list on legaldictionary. Something of value given in exchange for something else of value , usually in the context of a contract. In order for a contract or agreement to be legally binding, every party to the contract must receive some type of consideration.

In other words, a contract is a two-way street, so each party must receive something of value from the other party or parties. If one or more of these elements are missing, the contract lacks the necessary requirements, it could potentially be deemed invalid by the court. The required elements of consideration include: 1. The contract must include a bargain for the terms of the exchange.

This means there must be something that is worth bargaining over to both the parties. There must be a mutua. Most often, services or goods are exchanged or promised in a contract , though consideration may be whatever the parties agree to.

Consideration in a contract is the exchange of anything of value by each party. A contract may be deemed invalid by a court if it lacks recognizable consideration. Although the exchange of certain items or terms may seem like something valid on which to create a contract , not just anything meets the definition of consideration. Some of the scenarios where a contract lacks consideration includes : 1. The agreement is more of a promise of a gift, rather than a contract 2. One of the parties involved was already legally obligated to perform as specified by the contract 3. Damages – A monetary award in compensation for a financial loss, loss of or damage to personal or real property, or an injury. Obligation – A promise or con.

The technical requirement is either a detriment incurred by the person making the promise or a benefit received by the other person. The concept has been adopted by other common law jurisdictions. Under classical contract theory , consideration is required for a contract to be enforceable. Modern contract theory has also permitted remedies on alternate theories such as promissory estoppel). Say, for example, that your neighbor admires your bicycle.

One theory about consideration is known as the “ bargain theory.

Bargain theory holds that both parties involved in the contract believe the consideration to be arrived at as the result of their bargain. Thus, to some students of the law , the family promise, that is, as gratuitous. Under this doctrine, the promisor reasonably expects that the promisee, in reliance on the promise, will be induced by the promise to take action or refrain from taking action and the promisee does so. Instant Downloa Mail Paper Copy or Hard Copy Delivery, Start and Order Now!

Get started Start Your Contract for Services Answer a few questions. The legal definition of consideration is based on the concept of a “bargained-for exchange. Whether the consideration in the contract is adequate is not normally of concern when a contract is being evaluated in a court of law. The price is usually money – but can be anything that has value. Examples of consideration can include : Something that the promise will give to the promisor.

The carrying out of a specific act. Not doing something that the promise had the legal right to do. As with every part of a legal contract , there are rules that you need to follow to make sure that the contract is legally binding.

ANS: B MSC: AACSB Analytic 10. It is one of the six elements that must be present for a contract to be enforceable. Enforcing any legal contract requires it to have an element of consideration included in it. In simple words, it is nothing but a price that the promisee agrees to pay to the promisor.

Usually, the consideration is money or something else of obvious value. An example of when a contract could be enforced despite lack of consideration includes : Promissory Estoppel In the event of a breach of contract in under U.