Consideration CASES

In English contract law, consideration refers to something of value exchanged between parties, which is essential for forming a legally enforceable contract.

Definition and Principles

Consideration involves a benefit or detriment exchanged between contracting parties. It can include payment, services, goods, promises, or abstaining from actions a party is legally entitled to perform. For a contract to be valid, consideration must move from the promisee.

Key Characteristics

• Sufficient but not adequate: Consideration must have some tangible value in law but does not need to match the economic worth of the exchanged promise.
• Past consideration: Actions performed before the promise was made generally cannot serve as valid consideration.
• Existing legal duty: Performing an existing legal duty typically does not constitute valid consideration unless additional benefits or duties arise.

Types of Consideration

• Executed consideration: An act already performed when the agreement is made.
• Executory consideration: A promise to perform acts or obligations in the future.

Practical Importance

Consideration ensures mutual exchange and fairness within contractual agreements, distinguishing enforceable promises from mere gratuitous statements or gifts.