Elements of a Contract
Ques1. “Considerations must be sufficient but need not be adequate”- discuss.
In Contracts, What is "Consideration"?
In order for any contract to be enforceable, courts generally require three things: mutual assent (agreement to the contract terms), a valid offer and acceptance, and consideration.
Consideration in law is one of the three main building blocks of a contract. It can be anything of value, which each party to a legally binding contract must agree to exchange if the contract is to be valid. If only one party offers consideration in contract, the agreement is not legally a binding contract. In its traditional form, consideration is expressed as the requirement that in order for parties to be able to enforce a promise, they must have given something for it. Something must be given or promised in exchange or return for the promise. A contract must be met with or supported by consideration to be enforceable, also, only a person who has provides consideration can enforce a contract.
What Does “Adequate Consideration” Mean?
In order for a contract to be enforceable, 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 being made.
For example, if A promises that B that they will sell them their house worth $50,000, and B offers to pay only $100, this consideration is probably not going to be “adequate”. However, if B offers to exchange services that are roughly worth $50,000, then the consideration would be considered adequate. (Note that consideration need not be money, but can take the form of anything that has legal value.)
Although consideration must provide some benefit to the promisor or detriment to the promisee, these do not however have a great deal. Providing something is given in return for a promise, it does not matter that it is not much, or not what the promise would usually be considered worth. Courts would not inquire into the
In Contracts, What is "Consideration"?
In order for any contract to be enforceable, courts generally require three things: mutual assent (agreement to the contract terms), a valid offer and acceptance, and consideration.
Consideration in law is one of the three main building blocks of a contract. It can be anything of value, which each party to a legally binding contract must agree to exchange if the contract is to be valid. If only one party offers consideration in contract, the agreement is not legally a binding contract. In its traditional form, consideration is expressed as the requirement that in order for parties to be able to enforce a promise, they must have given something for it. Something must be given or promised in exchange or return for the promise. A contract must be met with or supported by consideration to be enforceable, also, only a person who has provides consideration can enforce a contract.
What Does “Adequate Consideration” Mean?
In order for a contract to be enforceable, 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 being made.
For example, if A promises that B that they will sell them their house worth $50,000, and B offers to pay only $100, this consideration is probably not going to be “adequate”. However, if B offers to exchange services that are roughly worth $50,000, then the consideration would be considered adequate. (Note that consideration need not be money, but can take the form of anything that has legal value.)
Although consideration must provide some benefit to the promisor or detriment to the promisee, these do not however have a great deal. Providing something is given in return for a promise, it does not matter that it is not much, or not what the promise would usually be considered worth. Courts would not inquire into the