Consideration in Contract Law: General Rule and Exceptions

CONSIDERATION

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
CONCLUSION ...............................................................................................................................5
REFERENCES................................................................................................................................5

INTRODUCTION
In a contract, there are various elements which make the agreement valid between the
parties and make the contract enforceable. In the initial of contract making one party give an
offer to the other party, if the other party has an intention to enter into an agreement party can
accept the offer. After the acceptance there is another element i.e. consideration, it is the value
given for the offer and acceptance. In the contractual term its definition is “ consideration is
something of value which is given to perform the promise, it is required to make the promise
enforceable as a contract (Baker, 2021). It can be in the form of promise i.e. to do something in
the purview of contract or it can be given in monetary form also. For example; A promise to B
that, if he build a business partnership with him the, A will bare all the liabilities alone, this is a
consideration in the form of promise. Another example of consideration is; A selling his car to B
by giving an offer of $5000, B accept the offer then, in this case consideration is that amount in
which party accept to form a contract. This essay covers the area of consideration in a contract
and in that particularly at what extent valid consideration will be present when a promise of past
consideration or a promise to perform a pre-existing duty has been made.
MAIN BODY
Consideration is the price given in exchange for goods and services under a contract, or a
promise to do or not to do something in return. Generally the price is usually but, it can be
anything which has a value. It cannot be given by a third party, and it is required to make the
contract legally binding (Barnett,2021). The landmark case which defined the term consideration
is Currie V Misa (1875), it Is the right, interest, profit, benefit, detriment etc. According to UK
contract law, consideration is categorised into two types i.e. executed and executory. Where
consideration has already been given or carried out is said to be executed consideration. It cannot
be something that happened in the past. In case of executory consideration, one party promise to
do something or not to do something in the context of the action perform according to the
contract. The amount of consideration should be sufficient and adequate, it doesn't mean that it is
of market value it is given as per the action perform in contract. Consideration must be given at
the time of agreement and it does not include the previous act, it means party does not consider
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