Valid consideration

The first and most important thing to be considered while making a contract is that the consideration must be passed on with the willingness of the promisor. 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 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. In order for a contract to be considered valid and enforceable by the courts, three elements of consideration must be met.

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. Every valid contract has to have consideration, meaning something of value must exchange hands. Both parties must give up something, but they both must benefit as well.

This is also called a quid pro quo, which simply means something received for something given. It may consist of a promise to perform a desired act or a promise to refrain from doing an act that one is legally entitled to do.

What does valid consideration mean? What are the types of consideration? Generally, past consideration is not a valid consideration and has no legal value. Past consideration is consideration that has already flowed from the promisee to the promisor. In a contract, one consideration (thing given) is exchanged for another consideration.

Not doing an act (forbearance) can be consideration , such as I will pay you $0not to build a road next. Having said that, consideration must meet other requirements. For a contract to be valid , both parties to the contract usually need to have consideration.

It is a price that the promisor agrees to pay to the promisee to constitute a valid contract. The exchange of Jerry’s promise for Ben’s act is valid consideration which makes the contract enforceable. Please note that Jerry is not exchanging his promise to pay $5for Ben’s promise to wash the car. Rather, Jerry is exchanging his promise to pay $5for Ben actually washing the car.

Thus the captain did not have to pay the extra money. Mutual promises constitute consideration for each other. If only one party offers consideration , the agreement is a bare promise and is unenforceable.