Executory consideration

What is executed and executory? See also executed consideration. It is something given or accepted in return for a promise, where the promised act remains to be performed on a future date.

Take for example a person promises to lend money to a person to purchase a car at a later date as long as the receiving party promises to pay back the borrowed funds. Executed And Executory Consideration It will be noticed that cases (2) and (3) differ from (4) in an important respect. In (2) and (3) the contract is formed by one party doing all he can be required to do under the contract.

Reciprocity of consideration is fundamental to contract law. In the case of executory consideration , one party is bound by the contract by promising to do something or not to do something. Sometimes, there is a dispute as to whether or not a contract is legally binding because of an alleged lack of consideration. EXECUTORY CONSIDERATION Consideration is executory when there is an exchange of promises to perform acts in the future. Consideration is an English common law concept within the law of contract, and is a necessity for simple contracts (but not for special contracts by deed).

The opposite of executed. There is an outstanding obligation on both sides. Where the benefit, in contemplation of which the promise is made, is done at the same time that the promise acquires a binding force, - where it is the doing of the act that concludes the contract, - then the act so done is called an executed or present consideration for the promise.

Consideration is classified as one of two types: executed: when the promise has been performed within the meaning of the contract, or executory : when the promise has not been performed. HENRY CAMPBELL BLACK, M. Remaining to be done. Definition of Executory. Create animated videos and animated presentations for free. Whether consideration has been provided by the parties is one of the fundamental steps in determining the legally enforceability of a contract.

It is a contract in which both sides still have important performance remaining. However, an obligation to pay money, even if such obligation is material, does not usually make a contract executory. An executory contract is a contract that has not yet been fully performed or fully executed. In contract law consideration is concerned with the bargain of the contract.

A contract is based on an exchange of promises. 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.

Executed consideration is where the promisor asks for something in exchange for his promise and the promisee provides consideration by giving the promisor what he has requested. As well as being either executed or executory , there are additional rules that must be met for consideration to be valid : Performance must be legal, the courts will not enforce payment for illegal acts Performance must be possible, agreeing to perform the impossible is not a basis for a biding. Absence of consideration could be in one of the following forms: Gratuitous promise by the defendant.

Non performance by the plaintiff.

Where consideration is furnished by a third party. Claim in excess of benefits provided for in an agreement. Practical Law Dictionary. Executory consideration is consideration that is yet to be provided. An obligation is material if a breach of contract would result from the failure to satisfy the obligation.

Thus, executory contract is that where under the terms of a contract something remains to be done by the parties. In other words, where one or both the parties to the contract have still to perform their obligations in future, the contract is termed as executory contract.