What are the rules of consideration?

Asked By: Dobrin Pelaz | Last Updated: 29th March, 2020
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Legal rules regarding consideration
Consideration must move from the promisee but need not flow to the promisor. Consideration must be sufficient but need not be adequate. Consideration cannot be illusory. Consideration must not be past. Past consideration is not good consideration.

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Keeping this in view, what is the law of consideration?

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. In a contract, one consideration (thing given) is exchanged for another consideration.

Subsequently, question is, what is consideration example? 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.

Correspondingly, what are the elements of consideration?

A legally binding contract needs three main elements: an offer, consideration, and acceptance. While the terms "offer" and "acceptance" are fairly straightforward -- an offer is made, and either rejected or accepted -- "consideration" refers to something of value that is being gained through the contract.

What are the essential elements of lawful consideration?

Basic Understanding of Consideration

  • Example 1 – Doing something.
  • Example 2 – Not doing something.
  • (i) Consideration must move at the desire of the promisor.
  • (ii) Consideration may move from the promisee to any other person.
  • (iii) It can be in the past, present or future.
  • (iv) It must have value in the eyes of the law.

35 Related Question Answers Found

What are types of consideration?

Kinds of Consideration
A Consideration may be: Executory Consideration or Future Consideration, Executed Consideration or Present Consideration, or. Past Consideration.

What does in consideration of mean?

something that is or is to be kept in mind in making a decision, evaluating facts, etc.: Age was an important consideration in the decision. thoughtful or sympathetic regard or respect; thoughtfulness for others: They showed no consideration for his feelings.

What is good and valuable consideration?

Good and valuable consideration. In the context of law 'consideration' means some trade-off, the 'good and valuable' part means that the trade must be for something of worth (valuable) and also something permitted (good).

What is consideration explain?

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.

What is consideration money?

Consideration Money means such amount as may be. Consideration Money means such amount as may be determined by the Chandigarh Administration in the case of sale/lease by allotment, and any price determined as a result of bidding in open auction in the case of sale/lease by auction.

Is a Promise consideration?

Consideration. In a unilateral contract, an agreement by which one party makes a promise in exchange for the other's performance, the performance is consideration for the promise, while the promise is consideration for the performance. Consideration must have a value that can be objectively determined.

Why consideration is important?

Consideration is one of the most important parts of a contract because it states why each party is joining the agreement. Consideration can be the exchange of money for products or services, or it can be a trade of one type of product for another type of product. Without it, the contract would be considered a gift.

What is valid contract?

A valid contract is a written or expressed agreement between two parties to provide a product or service. There are essentially six elements of a contract that make it a legal and binding document. In order for a contract to be enforceable, it must contain: Intent of both parties to carry out their promise.

What are the forms of consideration?

Something bargained for and received by a promisor from a promisee. Common types of consideration include real or personal property, a return promise, some act, or a forbearance. Consideration or a valid substitute is required to have a contract.

What are the six types of consideration?

for $250 .
  • 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 three characteristics of consideration?

Three Essential Characteristics of Valid Consideration:
  • Legality.
  • Adequacy.
  • The possibility of performance.

What are the two basic elements of consideration?

Thus, there are two basic elements to consideration: (1) Legal Sufficiency (something of value in the eye of the law) and (2) bargained for exchange. Both must be present to satisfy the requirement of consideration.

What is the function 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.

What makes a consideration valid?

What Constitutes Valid Consideration. Consideration should contain payment of money, some act, abstinence or promise. 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.

How do you prove consideration?

It must contain:
  1. An offer made by the promisor.
  2. An acceptance of the offer by the promisee.
  3. Consideration in the form of money or a promise to do or not do something.
  4. Mutuality between parties to carry out the promises of the contract.
  5. Capacity of both parties in mind and age.
  6. Legality of terms and conditions.

What is an important characteristic of consideration?

The term “consideration” is a concept in English law that refers to the price paid in exchange for the fulfillment of a promise. Its main characteristic is that the promissor must give a promise of something that is of value, and the promisee must give something of value in exchange.

What is executory consideration?

Executory Consideration Law and Legal Definition. Executory consideration is a consideration for a promise or an act, which consideration has not yet been performed and which the party who is to perform is either bound by contract to perform or not.