What are the rules of consideration in contract law?

What are the rules of consideration in contract law?

Each party to a contract must be both a promisor and a promisee. They must each receive a benefit and each suffer a detriment. This benefit or detriment is referred to as consideration. Consideration must be something of value in the eyes of the law - (Thomas v Thomas) (1842) .

What are the various types of consideration?

There are mainly three types of consideration:
  • Executory or Future Consideration: Executory Consideration, as the name suggests is one which is yet to be performed. ...
  • Executed or Present Consideration: Executed consideration, means the one which is concurrently provided when the promise is made.

How can a contract lack consideration?

When a Contract Lacks Consideration A contract may lack consideration if any of the following is true: The promise cannot legally (or practically) be offered. Offer is made for something that already has been done ("past consideration") and therefore cannot be bargained for.

Is a contract without consideration valid?

A contract without consideration is void because it is not legally enforceable. "Consideration" means that each party must provide something of value to the other party as designated by the contract terms.

What happen if there is no consideration in a contract?

Without consideration, a contract cannot be enforced or is otherwise voidable (with only a very few exceptions). The exchange of value is interpreted broadly to not only include money, but property, a promise, doing something, or even not doing something.

Can a contract be legally binding without consideration?

Consideration must move - ie be given in exchange for the promise given by the promisor - from the promisee. This means that consideration must be given by the person receiving a promise. ... That's not good consideration to form a legally binding contract - there isn't any.