Inadequate consideration refers to a situation where one party argues that the value that it provided the other party is greater than the value it was provided in return . Therefore, the consideration was inadequate. ... For example, past consideration is not legally sufficient consideration.
What does adequate consideration mean?
Adequate consideration means the reasonable value of the goods or services received in exchange for transferred property approximates the reasonable value of the property transferred . Sample 1.
What does inadequate consideration mean?
Inadequacy of consideration
Adequacy of the consideration means that the consideration which is paid is equal in value to the value for which it is paid. ... inadequate consideration is not void but it renders the contract unenforceable because of the improper bargaining or by itself.
What does adequate consideration mean in a contract?
In law, adequacy of consideration means that for a lawful agreement to be made between two parties, the offeree, also known as the beneficiary, must give in return, a fair price, that is either in equal measure or reasonably proportional to the value given by the offeror, also known as the benefactor.
What are the three 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 are the three requirements of consideration?
There are three requirements of consideration: 1 ) 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 by the other party.
What is legal sufficient consideration?
Legally sufficient means that the consideration consists of either: ... A promise to refrain from doing something a party is allowed to do by law . A promise for a party to do something he or she would not otherwise have an obligation to do.
What do u mean by consideration?
‘Consideration’ means “ something in return ”, i.e. quid pro quo that is an essential element to find out the genuine intention of the parties of the promise to create legal relationship. Consideration is an essential component of a valid contract. Consideration is the price for the contract.
What is the effect of the absence of consideration?
One of the main elements of a contract is consideration. Lack of consideration in contract law can make a contract unenforceable when both parties do not receive a benefit from entering into an agreement .
What is adequate and full consideration?
“Adequate and full consideration in money or money’s worth” is defined as “ consideration in money or money’s worth having a reasonable relationship to the true value of the interest in property acquired .
What is a valid substitute for consideration?
Promissory Estoppel as a Substitute for Consideration.
What does it mean to be supported by consideration?
consideration. n. 1) payment or money . 2) a vital element in the law of contracts, consideration is a benefit which must be bargained for between the parties, and is the essential reason for a party entering into a contract.
What are the two exceptions to the requirement of consideration?
Exceptions to the consideration requirement include the following: Promissory estoppel . Charitable subscriptions . Specific exceptions under the UCC provisions .
What is an example of consideration?
Anything of value promised by one party to the other when making a contract can be treated as “consideration”: for example, if A signs a contract to buy a car from B for $5,000, A’s consideration is the $5,000, and B’s consideration is the car.
What are the 6 rules of consideration?
- The consideration must not be past.
- The consideration must be sufficient but need not be adequate.
- The consideration must move from the promisee.
- An existing public duty will not amount to valid consideration.
- An existing contractual duty will not amount to valid consideration.
What is the law of consideration?
Consideration, in contract law, an inducement given to enter into a contract that is sufficient to render the promise enforceable in the courts . The technical requirement is either a detriment incurred by the person making the promise or a benefit received by the other person.
