Consideration is some thing of value promised by one party to another while entering into a contract. For a consideration to be valid there must be a promise from both sides . ... This means that there must be a promise by one party against the promise of the other party.
What is not a valid 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. ... An act done before the giving of a promise to make a payment or to confer some other benefit can sometimes be consideration for the promise.
What is valid consideration in contract law?
• Consideration, which must be given in order to make a contract legally binding, is legally sufficient and bargained-for value , given by the promisor in return for the promisee performing or refraining from performing some act which results in a detriment to the promisee and/or a benefit to the promisor.
What is meant by valid or good consideration?
A reason for doing something based on natural affection, generosity, love, or moral duty . This reason is insufficient to judge a commercial contract or promise enforceable as it lacks valid, valuable, and legal basis for the reason.
What is an example of consideration?
The definition of consideration is careful thought or attention or compassionate regard for someone or something. An example of consideration is someone deciding between two options for dinner . An example of consideration is someone bringing a friend dinner who just had a baby.
What is a valid substitute for consideration?
Promissory Estoppel as a Substitute for Consideration.
What are the 3 requirements of consideration?
Each party must make a promise, perform an act, or forbear (refrain from doing something). 2.) Each party’s promise, act, or forbearance must be in exchange for a return promise, act, or forbearance. 3.)
What are two exceptions to the rule requiring consideration?
One exception to the rule requiring consideration is promissory estoppel . In a bilateral contract the considerations for each promise is a return promise. In a unilateral contract, the consideration is one partys consideration is the promise and the other partys consideration is the act.
What are 3 invalid reasons for consideration of a contract?
When a Contract Lacks Consideration
Offer is made for something that already has been done (“past consideration”) and therefore cannot be bargained for . One or more of the parties agreed to something he or she already was obligated to do. A promise was actually a gift, not something bargained.
What are the types of consideration?
- Executory or Future Consideration: Executory Consideration, as the name suggests is one which is yet to be performed. ...
- Executed or Present Consideration: Executed consideration, means the one which is concurrently provided when the promise is made.
What is an example of good consideration?
Good consideration is founded on moral obligation or on natural duty and affection. For example, consideration for love and affection within the degree are recognized by law . Other examples of good consideration are motives of natural duty, generosity, and prudence.
What is consideration explain?
‘Consideration’ means “something in return” , i.e. ... Consideration is the price for which the promise of the other is bought, and the promise thus given for value is enforceable.” An agreement without consideration is a bare promise and exnudo pacto non aritio actio, i.e., cannot be held to binding on the parties.
What are the exceptions to the rule of consideration?
The exception to the rule of consideration squarely falls within the purview of the statute. Indian Contract Act in section 25, categorically provides for the three situations whereby the requirement of consideration ends. It is natural to love, affection, voluntary service and payment of the time-barred debt .
What are the six types of consideration?
- 1.An offer made by the offerer.
- 2.An acceptance of the offer by the offeree.
- Consideration in the form of money or a promise to do or not do something.
- Mutuality between parties to carry out the promises of the contract.
- Capacity of both parties in mind and age.
- Legality of terms and conditions.
What are the 4 types of consideration?
- Executory Consideration or Future Consideration,
- Executed Consideration or Present Consideration, or.
- Past Consideration.
What is consideration simple words?
: something (as an act or forbearance or the promise thereof) done or given by one party for the act or promise of another — see also contract — compare motive. Note: Except in Louisiana, consideration is a necessary element to the creation of a contract.
