Consideration In Contract Law

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1. The consideration must come into existence either at the same time or after the promise. Where the stipulated consideration pre-dates the promise, it will not be considered 'good' consideration (eg, a promise by A to transfer ownership of a car to B in exchange for assistance B provided to A the previous month). This was discussed in, Roscola v Thomas, where the promise was not binding because the only “consideration” provided for a promise about the soundness of a horse was entering into the original contract - this had occurred before the promise was made. 1. Roscola v Thomas (UK, 1842)Promise that horse was sound made after contract of sale was not supported by good consideration 2. Harrington v Taylor (USA, SC of North Carolina, 1945)Promise to pay damages made to P after P came to D's aid, not supported by good consideration Exception Past consideration can be good consideration if (a) provided at the request of the promisor (b) the parties understood that the act would be remu
2. Where the promisee is already contractually bound to the promisor, the general rule is that performance of an existing contractual obligation will not be good consideration unless some additional benefit is conferred. However, it is sometimes difficult to determine whether an additional benefit is conferred; in particular, a benefit may exist if performance of the existing duty avoids problems that are associated with non-performance (and the benefit of that exceeds the detriment likely to have been suffered by non-performance: Musumeci) 1. Stilk v Myrick (UK 1809)Perfomance of existing duty not good consideration for promise of additional payment 2. Williams v Roffey (UK, 1991)Performance of existing duty can be good consideration for promise of additional benefit if it confers additional benefit or obviates disbenefit and is not given as a result of duress/fraud 3. Musumeci (NSWSC, 1994)Promise to accept less rent enforceable (practical benefit obtained) - performance of existing

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1. Consideration is essentially the price of a contract or for what the contract provides. More often than not, this is by way of money. However, it does not have to be strictly monetary. In fact, consideration can take the form of an ‘act, forbearance or a promise.’ An example of a promise can be seen in historical transfers of land. A spouse transferring property into both spouses’ names could list the consideration from the other spouse as ‘love and affection.’ The range of things that can be consideration is extremely broad. It has even been deemed to include Peppercorns, despite whether or not the seller would use them. Subsequently, if you wanted to give your house to your friend, for a contract to be valid they would need to provide something. This could be them paying $1 or buying you dinner. However, if something isn’t provided by both parties to a contract, then it won’t be enforceable. Despite this, there are several rules that regulate what is and isn’t consideration. As su
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Thirdly, the law of contract only enforces bargains; the consideration must, in short, be (and perhaps even be regarded by the parties as) the ‘price’ of the promise. Fourthly, past consideration is not suffi­ cient consideration. Fifthly, consideration must move from the …

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2. Author: Patrick Atiyah
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4. Publish Year: 1971

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known as the price paid for the offer). Consideration - the common law requires that, for an agreement to be binding, the offer and acceptance must provide consideration (payment of some kind) for the promise they have received. There has to be evidence both parties to the contract must receive a benefit. Contract Law in Australia - 2019

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In order for a contract to be enforceable in a court of law, the consideration that is exchanged must be deemed “adequate”. This means that the mutual exchange must involve a fair price in comparison to the promise that is made in exchange for it.

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Discover the remaining five elements of contract law and take an in-depth look at rules of consideration by studying the outcomes of an actual case decided in a court of law. Updated: 08/31/2021

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The Frederick Pollock defined the consideration as “an act of forbearance of one party, or promise thereof which is the price for which the promise of the other is bought and the promise thus given for values is enforceable.”The constitute of consideration are as follows: 2.1 Consideration must be moved from the promise.

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– Nor (other) civil law systems – Compare to Principles of European Contract Law (1998), Article 2:101 • Basic rule: – A promise will not be enforceable unless it is supported by consideration. Main exception to this rule = promises made under seal. Definition (1) • A common definition is in terms of the price of a promise, i.e. what one party must “pay” (not …

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The Australian Consumer Law ( ACL) sets out certain rules that your business must follow when displaying pricing. In this article, we break down the key legal considerations. 1. The Single Price Rule. When advertising your goods or services, you must display a single price that refers to the minimum total cost of the product.

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Price v Easton (1833) Easton made a contract with X that in return for X doing work for him, Easton would pay Price £19. X did the work but Easton did not pay, so Price sued. It was held that Price’s claim must fail, as he had not provided consideration. Alliance Bank v Broom (1864) The defendant owed an unsecured debt to the plaintiffs

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Consideration in a contract is the exchange of anything of value by each party. Most often, services or goods are exchanged or promised in a contract, though consideration may be whatever the parties agree to. Examples include: Money Services Personal property Real property Promise to act Promise to refrain from acting Lack of Consideration

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Consideration in contracts refers to the benefit each party receives in exchange for what it gives up in the contract. It is a vital element that must be present in a contract in order to make it legally binding on the parties. A contract, whether oral or in writing, becomes invalid if there is no consideration involved.

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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 $1,000 not to build a road next to my fence."

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‘Consideration’ means “something in return”, i.e. Consideration is an essential component of a valid contract. Consideration is the price for the contract. An agreement without consideration is void and thus not enforceable by law except under certain circumstances. What is a future consideration? From BR Bullpen. Future considerations is a …

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Therefore, what matters is, consideration must be something of value, as per law, which the parties are free to determine while entering into the contract. Must not be the performance of legal duty: It should not be an act which a person is bound to perform, as per law. Such contracts are regarded as void contracts. However, if a person promises to do something …

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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. Now, this price can be paid as a benefit to the promisor and/or a loss or detriment to the promisee.

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The consideration which is the benefit of the contract for one party (say, receiving money) is the burden of the other (say, paying money). Without consideration being given by each party to the contract, the contract can't be legally binding. Accordingly, gratuities are not enforceable in law. For example, this is a gratuity:

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Frequently Asked Questions

What is consideration in contract law?

Consideration is the price that is asked by the promisor in exchange for their promise – the price for a promise. In many jurisdictions consideration is not an essential element of a contract – it is sufficient that parties have reached a binding agreement.

Is a contract without consideration enforceable?

The general rule of law is that an agreement without consideration is void. But there are a few exceptional cases where a contract, even though without consideration, is enforceable. We know that consideration involves a concept of give and take.

What is a substitute for consideration in a contract?

Some contract laws allow for a substitute of consideration, such where one party has already reasonably relied upon the promise to their detriment. This is known in the law as promissory estoppel.

What is the essence of contract law?

This is the essence of a legal contract, the exchange of consideration without which there is nothing more than an unenforceable promise. UKEssays. (November 2018). Example Contract Law Cases - What is Contract Law?.

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