The concept of consideration in contract law includes

What is consideration in a contract explain? In the legal system , the term consideration in contract law refers to something of value given to someone in return for goods, services, or some other promise. A valid contract must include consideration for every party involved. In simple terms, consideration is the basic reason a party enters into a legal contract.

The technical requirement is either a detriment incurred by the person making the promise or a benefit received by the other person.

Thus, the person seeking to enforce the promise must have pai or bound himself to pay, money, parted with goods, spent time in labour, or foregone some profit or legal right. There are two types of consideration : executed and executory. Where consideration has been given (executed), consideration has already been carried out. Under classical contract theory , consideration is required for a contract to be enforceable. Consideration is a central concept in the common law of contracts.

Modern contract theory has also permitted remedies on alternate theories such as promissory estoppel). However, today, the law of contracts is largely based on case law that has been established over the last century and a half.

Along with common law and case law , this course will incorporate two other canons of contract law into the discussion: the uniform commercial code and the statute of frauds. It distinguishes a bargain or contract from a gift. Under this doctrine, the promisor reasonably expects that the promisee, in reliance on the promise, will be induced by the promise to take action or refrain from taking action and the promisee does so.

The concept has been adopted by other common law jurisdictions. In the law of contract , this payment is known as consideration. All that matters is that the person who was promised (promisee) gave or did something in return for the promise.

Reciprocity of consideration is fundamental to contract law. The exchange of consideration creates a benefit and a burden for each party entering into a contract. The consideration which is the benefit of the contract for one party (say, receiving money) is the burden of the other (say, paying money). 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.

The legal definition of consideration is based on the concept of bargained-for-exchange, where the parties of the contract agree to the exchange of something of value. In a valid contract , the consideration is the portion that explains the legal value that will be exchanged.

It is one of the six elements that must be present for a contract to be enforceable. The common law doctrine of consideration (return for a promise), as an essential component of the validity of a contract , is not prevalent in Sri Lanka, as a general rule. The parties to the contract must bargain to determine an appropriate consideration , the consideration must include a mutual exchange, and the consideration must have some intrinsic value.

Whether the consideration in the contract is adequate is not normally of concern when a contract is being evaluated in a court of law. Note that consideration should be of value and has to be adequate. Usually, a court will not look into whether adequate value has been given as the courts do not normally interfere with the bargain struck between the parties.

Principal of formation contract discusses the factors that are vital to the formation of a valid contract in legal terminology, offer, acceptance, consideration , and the intention to create a legal relationship. The law of contract is of enormous complexity. Contract pervades the professional life of the artist. The exception is for contracts that only one party signs, such as assignments, option agreements, or promissory notes. Something of value given by both parties to a contract that induces them to enter into the agreement to exchange mutual performances.

It may consist of a promise to perform a desired act or a promise to refrain from doing an act that one is legally entitled to do. According to contract law , an agreement made between two or more people or business entities, in which there is a promise to do something in return for a gain or advantage, is legally binding.