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Consideration Law

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Consideration

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Consideration is the price that the promisor asks in exchange for their promise, that is, the price of a given promise. Consideration is not a significant part of a contract in a number of jurisdictions. Once parties have reached a binding agreement, that becomes sufficient. Nevertheless, the common law requires that for agreement to be binding, the person to whom a promise is made (promisee) must offer consideration (maybe in monetary terms) for the promise given to him (Lorenzen, 1918, p.28). Hence, most gratuitous promises are never enforced because of a few exceptions. There are different types of consideration and they include:
Executory consideration
Executory consideration is a type of consideration where the promise has not yet completed the requirements of the consideration. Therefore, executory consideration will exist in cases where the promisor’s promise is made in return for a counter-promise from the plaintiff. For instance, A makes a promise of delivering some products to B at a future date and B promises to make payment for the goods once he receives the shipment. B can sue A for breach of contract if A fails to deliver the goods (Carter et al., 1996, p. 312).
Executed consideration
Consideration is termed as executed when the consideration is issued at the time the contract is made. Therefore, an executed consideration will only come into existence when the promisor’s promise is matched by a performance of an act. For instance, Philip can offer to pay Shawn $200 if Shawn brings his boat and takes Philip and his family out of his island (Hart, 2012, p. 56).

Past consideration
It is regarded as an insufficient consideration, that is, there is no consideration at all. Past consideration comes into life when the promisee’s actions precede the promise…...

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