When at the desire of the promisor, the promise or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or abstain from doing something, such act or abstinence or promise is called a consideration for the promise, is how consideration is defined according to Section 2(d) of Contracts Act 1950. Without consideration a contract will not occur. Therefore, it is very vital for consideration to exist to form a contract. Consideration is related to a Latin phrase “Quid Pro Quo” which means a party gives or receives something in return for something the other party gives. This means, for a contract to be valid… Examples of consideration include money, promise to act, promise to abstain from acting, services and many more.
Consideration is defined by referring to the well-known English law case of Currie v Misa (1875) as “a valuable consideration in the sense of the law may consist either in some right, interest, profit or benefit accruing to one party, or some forbearance, detriment, loss or responsibility given suffered or undertaken by the other” (Lush J, 162).
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First and foremost is the past consideration. Past consideration is defined as consideration given in return after performing the act. The act performed is independent. Two parties were not connected to each other until the contract is formed. Past consideration is valid according to Malaysian law. The phrase “done or abstained from doing” shows past consideration exist. For an example, Rama saved Kiri’s son from drowning in the swimming pool. Kiri promised to reward Rama RM 500. This shows that Rama’s act is past, and the promise is made after the act. Therefore, this illustration is past
Contracts are legally enforceable promises. There are two requirements for contract formation: agreement and consideration. An agreement involves a valid offer being made by an offeror to an offeree and said offer being validly accepted by the offeree and communicated to the offeror. The second requirement is consideration, meaning the two parties exchange something of legal value. Contracts serve the purpose of ensuring stability, predictability, and certainty, as well as deterring defection, in business dealings. The objective theory of contract law states that only the language of the contract should be considered in contract interpretation. This theory ignores entirely the intent of the parties. However, contract law is largely
Both party must give consideration. In unilateral contract, the offeror’s promise must be exchanged with the offeree’s performance.
It can also be the promise to pay. For an enforceable contract, the consideration provided must be agreed upon by all parties. In the Jim and Laura case, there is no contract. For a contract to be present and enforceable, an offer must be made. The offer was made as the two parties discussed on purchasing the car and even the party being offered the car left with the car. This offer, however, lacks merit because the proposal was not specific. The two parties did not have a common mind on how to purchase the car. It can also be established that there was no contract mutuality of obligation was not existent (Kurtz & Boone, 2009. The buyers had not agreed to the terms. The terms as explained later by Stan were not the same that Jim and Laura heard in the first instance. Time of agreement is also not detailed. This element has not met at all and, therefore, there was no contract. Consideration plays a big role in law of contract. Businesses are very specific on what ensuring revenues are high all year round. As a result, consideration is critical because it has the ability to tilt profitability of a company. During contracting, considerations must be understood by all parties and agreed upon. In this case, Jim and Laura never agreed on any considerations. They in fact did not know whether there were considerations that were presented to them. This is enough to claim that there was no contract. For there to be a
Of all the topics as discussed in the class, the topic consideration has greatly drawn my interest and I got eager to find the appropriate meaning of Consideration in accordance to the Indian Contact Act (1872). The meaning of the term consideration is defined in Section 2 (d) of the Act is somewhat different from how the word ‘Consideration’ is understood in ordinary parlance. In this response paper, I seek to explore the specific manner in which the Contract Act defines ‘consideration’ and how such a definition fits in with the general scheme of the Contract Act, with the hope of responding to some of the difficulties the definition of consideration raises for contract law.
English has never been my best subject. Reading books can be exciting, but the writing aspect of English can be dreadful. Somehow, however, I passed all my advanced English classes with at least a B, and my teachers always considered me to be “above average.” My impartiality toward English shifted to an indifference near the end of my high school career; my indifference then shifted to appreciation. This appreciation is attributed to American Studies and Honors Writing, the most difficult English classes at Belleville East Township High School. American Studies and Honors Writing have strengthened my writing skills beyond what I believed possible. I still do not believe that I am the best writer, and English may never be my best or favorite
(Insert Citation p 305). Consideration refers to the attained good or service agreed upon by each party under a contract. Contractual Capacity is the legal ability to enter into a binding agreement. Some factors that affect contractual capacity are: age, mental health and agreements under alcohol intoxication. Last but not least is the legal object, which means that for a contract to be enforceable it must be of legal intent and comply with public policy. If all of these factors are present in a contract, we can conclude that a binding contractual agreement exists and it is enforceable by law.
The making of a promise involves the voluntary giving of one's word that, if and when a particular circumstance or situation comes about, one will undertake to act in a manner defined by the terms of the promise one has given. The act of making the promise, in other words, implies a willingness to keep it. What is being agreed is that, on the basis of something said in the past, one's future actions will, insofar as the future is foreseeable, follow a particular course and no other.
Intention to create legal relations can be defined as follows. ‘An agreement will only become a legally binding contract if the parties intend this to be so. This will be strongly presumed in the case of business agreements but presumed otherwise if the agreement is of a friendly, social or domestic nature.’ Source (HNC unit 5 Business law course book) In determining whether the parties intend their agreements to be legally binding the court is guided by two presumptions. Parties to a domestic or social agreement do not intend to be legally bond. Parties to a business agreement intend to be legally bond. These are presumptions only and can be rebutted by sufficient evidence to the contrary. Domestic and Social Agreements Balfour v Balfour (1919) Merritt v Merritt (1976) Simpkins v Pays (1955) Business Agreements Jones v Vemons Pools (1938) Source (HNC Business law notes) One of the essential elements in the creation of a binding contract, this intention is implied by the fact that it is not expressly denied. If expressly denied (as in a so-called gentlemen's agreement) the contract may not be enforceable. Consideration {text:bookmark-start} {text:bookmark-end} If you look at a legal agreement or contract, you will generally see a phrase in the opening paragraph indicating that the parties agree on an amount of money or "other good and valuable consideration." The concept of consideration has a long history in the law, but simply means something of value. An exchange of consideration between the parties to an agreement is necessary fo...
The English contract Offer and Acceptance General principles There are three basic essentials to the creation of a contract which will be recognised and enforced by the courts. These are: contractual intention, agreement and consideration. The Definition of an Offer. This is an expression of willingness to contract made with the intention (actual or apparent) that it shall become binding on the offeror as soon as the person to whom it is addressed accepts it. An offer can be made to one person or a group of persons, or to the world at large.
This judgment given set criterion which is still been used in the modern court system and due to this case it was developed that an offer of contract can be unilateral and doesn’t have to be made to a specific party only. Also it was developed to that the acceptance of an offer does not require a notification and that once the concerned party purchases the product the contract is active then and there itself. And it was also established that purchase of an item is a fine example of consideration and therefore makes it a valid contract. (Smith, 2000).
The most authoritative definition of consideration stems from Currie v Misa in which the judgement of Lord Justice Lush defines consideration as “some right, interest, profit or benefit accruing to the one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other.” Consideration is therefore, in essence, the price for which a promise is bought. Normally, a promise cannot be contractually binding unless it is supported by some form of consideration and there are numerous rules surrounding it’s successful operation. These include: consideration must move from the promisee, consideration must not be past and consideration must be sufficient but need not be adequate.
Over the course of the semester, I feel that I have grown as a writer in many ways. When I came into the class, there were skills I had that I already excelled at. During my time in class, I have come to improve on those skills even more. Before I took this class I didn’t even realise what I was good at. This is the first class where I felt I received feedback on my writing that helped me to actually review my work in see what areas I lacked in and where I succeeded. Some of the skills I had shocked me as I didn’t think I had those capabilities in me.
One of the last remaining strongholds of classical contract law is the notion that contracts require offer and acceptance therefore, in order for a contract to become binding, offer, acceptance, consideration and intention to create legal relations must exist. However contracts are formed in different ways for each different circumstance. (Shawn Bayern, Offer and Acceptance in Modern Contract Law: A Needles Concept, 103 Cal. L. Rev. 67, 102 (2015)
Consideration is an aspect of the concept of mutuality underlying the law contract, and it is each party in contract bargains with and gives in exchange for return promise or performance of other party. In this case the consideration is an executory and the price $1,900 is has a legal value so the consideration is sufficient and the original price that Tony would like to sale is $1,900 and Emma received this price so the consideration is adequate. Therefore, there is a valid
In English Law consideration is one of the three main areas of an enforceable contract. It may be defined as an act, forbearance or promise made by a single party that constitutes the price for which the promise of another, is bought. In simple terms, the basic understanding of consideration may be seen as a ‘give and take’ tactic between two parties.