What Is the Meaning of Consideration in Contract Law
On the other side of the coin, the illegal consideration could be a promise not to do something a party is legally required to do, such as paying taxes. B or comply with a legal regulatory requirement. Employment may also include a provision that changes to the contract may be made without the employee`s consent. That is another legal issue. The answer is based on a whole range of moving parts that we don`t cover here. A party that is already legally required to provide money, object, service or forbearance will not take into account if it simply promises to comply with this obligation.    This legal obligation may arise from the law or from an obligation under a previous contract. Similarly, if a party is already legally obligated to do something, it cannot be a new consideration. Suppose A is a film screenwriter and B runs a film production company. A said to B, “Buy my script.” B says, “How about that – I`m going to pay you $5,000 so your film won`t be produced for another year. If I produce your film this year, I will give you $50,000 more, and no one else will be able to produce it. If I don`t produce your film this year, then you can leave. If the two subsequently come into conflict, the question of whether a contract exists is answered.
B had an option contract – he could decide if he wanted to produce the script or not. B`s counterpart was the downward amount of $5,000 and the possibility of $50,000. A`s counterpart was the exclusive rights to the film script for at least one year. In Currie v. Misa , the court stated that consideration was a “right, interest, profit, advantage or abstention, disadvantage, loss, liability”. Therefore, the consideration is a promise of something of value given by a donor in exchange for something of value given by a promisor; And generally, the question of value is a good, money or a stock. Act with indulgence, . B as an adult who promises to quit smoking, is only enforceable if you thus waive a legal right.
   Employers frequently ask employees to sign a revised version of their employment contract. The revised version of the contract is usually made on worse terms than the original. The consideration that is advantageous for one party to the contract (e.B receive money) is the charge of others (e.B. the payment of money). Do you have a problem with a contract that you can easily fix? Does a technical point of contract law in your contract hinder you in what you want to do? Consider the uncle`s situation above. If the same uncle had instead made the following offer to his 13-year-old nephew: “If you don`t smoke cigarettes, drink alcohol, swear or play cards for money before your 21st birthday, then I`ll pay you $5,000.” On the day of the nephew`s 21st birthday, he asks the uncle to pay, and this time, in the next trial, the nephew can win.  Although the promise not to drink and play alcohol before the age of 21 was not a valid consideration (it was already prohibited by law), most states allow smoking at 18 and swearing, while some consider it vulgar, is not illegal at any age. Although smoking is prohibited by law until the age of 18, it is legal for people over the age of 18, and therefore the promise to renounce it completely has legal value. However, the uncle would still be exempt from liability if his nephew drank alcohol, even if this consideration is worthless because it has been combined with something of legal value; Therefore, compliance with the entire collective agreement is required. In general, consideration in the past is not a valid consideration and has no legal value. Previous considerations are considerations that have already flowed from promising to promising.
That is, the act or tolerance of the promise is older than the promise of the promise. The consideration in the past cannot therefore be used as a basis for claiming damages.  Talk to a contract lawyer about your agreement and clarify it. Call us to speak to a contract lawyer on +44 20 7036 9282 or email us at firstname.lastname@example.org. Regardless of the type of contract you sign, you`ll likely hear the term “consideration.” In addition to the offer and acceptance, “consideration” is one of the essential elements of a contract. But what does this really mean? Suppose B commits an offence against A that causes $5,000 in damages and $3,000 in punitive damages. Since there is no guarantee that A would win against B if he went to court, A can agree to drop the case if B pays the $5,000 in damages. This is sufficient consideration because B`s consideration is a secured recovery and A assumes that B only has to pay $5,000 instead of $8,000. For this reason, the consideration may be insufficient from a commercial point of view, but for legal purposes: for example, a buyer of goods who has paid £10 in the past. It is not a good consideration for the delivery of new goods to conclude a new contract. One party promises £10 for a witness to make false statements in court.
Consideration is a concept of English common law and is a necessity for simple contracts, but not for special contracts (contracts by deed). The concept has been adopted by other common law jurisdictions. The definition of consideration in relation to contract law is when each party derives a certain advantage from the signing of the contract. The counterparty requires a concession or a change of position for each party. The main types of considerations include: However, some courts in the United States may challenge a nominal consideration or a virtually worthless consideration. Some courts have since considered this a deception. Since contractual disputes are usually resolved by state courts, some state courts have concluded that the mere provision of $1 to another is not a sufficient legal obligation, and therefore there is no legal consideration in this type of business, and therefore no contract is concluded….