Valid Consideration in Contracts: Understanding its Importance
In contract law, consideration plays a crucial role in converting a promise into a binding agreement. Explore the concept of consideration, including past consideration and its significance for enforcing contracts. Learn why consideration must move from the promisee, be sufficient, and recognized by law.
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Presentation Transcript
Consideration from the promisee normally takes a form of Payment of Money. But, it could consist of some other service to which promisor might agree. Important The promisee MUST provide something in return for the promise of the promisor; To convert a bare promise made by the promisor in to a valid binding promise.
1.Past Consideration Something already completed before the promise is made. This is NOT valid consideration in the eyes of the law. Consideration is considered past when it consists of some service or benefit previously rendered to the promisor.
Consideration Must Move From The Promisee Only a person who has provided consideration can enforce that promise as a contract.
Consideration Must Be Sufficient But Need Not Be Adequate Courts will NOT investigate the fairness of the consideration as long as; Recognized by the law as having a value. It is acceptable by courts. Mountford V. Scott Paid $1 to purchase a house. It was deemed good consideration. Chappell V. Nestle Three wrappers given by the defendant s chocolate was considered good consideration for the purchase of a gramophone.
