Contract Law Coursework Assignment

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Contract Law Coursework Assignment

Contract Law Coursework Assignment

Theoretical Background of “Consideration” in Contract Law

Consideration refers to any object, service, promised act, self-restraint from an anticipated act, or money amount, or likewise anything else that has exchange value. In contract law, the concept of consideration refers to the exchange that takes place in a contractual agreement. Contracts are based on the very essence of exchanges based on promised agreements. In a contractual agreement, every involved member to the contract must be in a position that he acts as both a promisee (to whom something is owed) and a promisor (the one who owes). This automatically hints to the concept that each of the contractual members must not only be at a disadvantage, but must also gain an advantage from performing their due responsibilities within the contractual terms, and enjoying their due rights (the withdrawal from which gives the promisee a right to sue the other party and possibly end the contract). It is this benefit (which is to be received by both the parties) which is called “consideration”.

In order for a consideration to be recognizable in the eyes of the law, it should have a legal purpose or means; which automatically deters out betting, etc. Also, a condition for anything to be regarded as of being consideration is that it should be done by each party in a contractual agreement. Gifts cannot be enforced in a legal context, except for them being mentioned as a part of a deed.

In the context of promises as consideration for a contractual agreement, the promise must be supported by consideration. If it is not supported, it would not be a valid contract and thus would not be enforceable in a legal context. However, mutual promises with a legal intent may be regarded as consideration for each other.

Even though common law strictly requires upon the requirement of consideration (even though in some examples the jurisdictions make an effort to create consideration, for example in Ward v. Byham, [1956] and in Williams v. Roffey Bros. & Nicholls (Contractors) Ltd., [1991]) fairness would, in some contexts, support promises which are not regarded by the legal concept of consideration, via the principle of promissory estoppel.

Promissory Estoppel

It refers to the legal principle which prevents a person from refusing to pay his part in the earlier made agreement, but which is not legally recognized as a consideration. Promissory estoppel requires some conditions to be implemented accurately: (1) a legal contract should have been present which gets modified later; (2) A clear promise should have been existent; (3) A change of position should have taken place; (4) Allowing the promisor to default from his earlier pledge would be unfair in essence.

Rules relating to Requirement of Consideration

The law of consideration in contract law is governed by a number of rules, which are mentioned as follows:

Either part of an authentic consideration should not have been existing in the past. Both the parts in the consideration should be existing when the promise is being ...