Quick Answer: What Is Meant By Consideration?

What is consideration explain?

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..

What are the types of consideration?

Kinds of ConsiderationExecutory Consideration or Future Consideration,Executed Consideration or Present Consideration, or.Past Consideration.

What are the six types of consideration?

Me too!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 is the cause of a contract?

Cause Cause is an essential element of a contract which is more proximate purpose that the contracting parties have in view at the time of entering into the contract. It is also called causa which is the immediate or direct reason. … The illegality of one’s motive does not render the contract void.

What makes a written contract valid?

Generally, to be legally valid, most contracts must contain two elements: All parties must agree about an offer made by one party and accepted by the other. Something of value must be exchanged for something else of value. This can include goods, cash, services, or a pledge to exchange these items.

What are the requirements for consideration?

Elements of consideration 1. A performance or a return promise must be bargained for. 2. A performance or return promise is bargained for if it is sought by the promisor in exchange for his promise and is given by the promisee in exchange for that promise.

What are two exceptions to the rule requiring consideration?

One exception to the rule requiring consideration is promissory estoppel. In a bilateral contract the considerations for each promise is a return promise. In a unilateral contract, the consideration is one partys consideration is the promise and the other partys consideration is the act.

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 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.

What is cause or consideration?

Cause or consideration is the essential reason which moves the parties to enter into a contract. This is the “why of the contract” which dictates the nature of the contract. … For gratuitous contracts, the cause is the liberality or generosity of a party.

Can a promise be consideration?

In order for consideration to provide a valid basis for a contract — and remember that every valid contract must have consideration — each party must make a change in their “position.” Consideration is usually either the result of: a promise to do something you’re not legally obligated to do, or.

What are the 3 requirements of consideration?

Each party must make a promise, perform an act, or forbear (refrain from doing something).

What are included in consideration?

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.

What is the purpose of consideration?

Consideration is—with some exceptions—a required element of a contract. It is the bargained-for giving up of something of legal value for something in return. It serves the purposes of making formal the intention to contract and reducing rash promise making.

What is valid obligation?

This Agreement has been duly authorized, executed and delivered by Company and has been duly executed and delivered by Executive and is a legal, valid and binding obligation of Company and of Executive, enforceable in accordance with its terms.

Top five legal considerations when starting upChoose the right structure. Choosing the right business structure is important because it will have implications for the life of the business. … Document the structure. … Consider your obligations. … Protect yourself. … Employer responsibilities.