LAW

Published on
Consideration in Contract Law
I. Definition:
  • Consideration is an essential element for a legally binding agreement in a two-party contract.
  • It represents the 'something of value' exchanged between the parties.
II. Nature of Consideration:
  • What it can be:
    • A party doing something.
    • A party not doing something (forbearance).
    • A promise to do something.
    • A promise to not do something.
  • Monetary Value Not Required: Consideration does not necessarily need to be a payment of money. The exchange of goods or services can be sufficient.
III. Practical Application:
  • Goods/Services for Payment: Consideration is readily apparent in standard transactions where goods or services are exchanged for payment.
  • Nominal Consideration: To eliminate ambiguity, a nominal sum (e.g., £1) may be explicitly stated as consideration, especially in agreements like confidentiality agreements.
IV. Key Rule:
  • Past Consideration is No Consideration: Actions completed before a promise is made cannot serve as valid consideration for that promise.
V. Comparative Law Note:
  • Other legal systems may not require consideration for a contract to be valid, or their rules regarding consideration may differ substantially from English law.​
Picture
0 Comments

Author

Learn the fact about law