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Nordijsko hodanje Srbije

Legal Term for Consideration

Contracts where a legally worthless clause is associated with a legally binding clause are generally still enforceable. Although we have tried to describe the basics of consideration in contracts here, it can be very complex. The legal consideration in your contract includes something of value to both parties that is being negotiated. One party cannot “win” the other party in the contract; both parties must see a similar benefit to signing the contract. This does not mean that the consideration is monetary; Instead, it`s just something of value to the parties involved, such as a service, personal property, or real estate. A promise cannot be based on considerations that were said, given or made before the promise was kept. Something that is said after does not count in return. For example, if X promises to reward Y for an action that Y had already performed, then the promise to be rewarded for it is a good consideration if the execution of that action is a good consideration, but the promise to be rewarded for it is a past consideration and therefore not a good counterpart. A promise to fulfil an already existing contractual obligation owed to a third party (as opposed to the performance of that obligation) may also constitute consideration. [17] The rule that a recital in the past is not a good consideration is subject to the exception discussed by the Privy Council in pao On v. Lau Yiu Long. [17] In this case, their lordships considered that consideration in the past may be good consideration if: Another exception is that partial payment of the debt by a third party in exchange for a promise to release the creditor of the entire amount prevents the creditor from suing the debtor for full payment (see Welby v.

Drake). While there is no law that should contain exactly one contract, most researchers agree that the only statement that is really required is something along the lines of “the parties agree.” However, if there is a type of contract where only one party signs, e.B a promissory note, option contract or assignment, more formal consideration language is appropriate. Suppose B commits an offence against A that causes $5,000 in damages and $3,000 in punitive damages. Since there is no guarantee that A would win against B if he went to court, A can agree to drop the case if B pays $5,000 in damages. This is sufficient consideration because B`s consideration is a secured recovery and A`s consideration is that B only has to pay $5,000 instead of $8,000. There must be some kind of connection between a promise and the consideration that is offered to support the promise. It does not envisage “refraining from conduct that should never be pursued.” [18] The consideration must have been at least an incentive to make the promise. In Roscorla vs. Thomas, Roscorla had signed a contract to buy a horse from Thomas for £30.

After the sale, Thomas Roscorla promised that the horse was healthy; the horse turned out to be vicious. It was found that Roscorla could not enforce the promise, since the consideration for entering into the contract for the purchase of the horse had been fulfilled at the time of the engagement; in a sense, the consideration was “exhausted.” [16] The target recipient must provide consideration, but it does not have to be paid to the bidder. For example, it is a good consideration for person A to pay person C in exchange for services provided by person B. If there are common promises, then the consideration should be based on only one of the promises. Second, what you are negotiating for does not have to meet someone else`s standards of value, and the courts have always refused to comment on that issue. In other words, if you offered to sell your bike to your neighbor and in return you asked for his collection of vintage cigar cans, and your neighbor agreed to pay that amount (i.e. give you his collection of cigar boxes for the bike), it doesn`t matter if the deal may seem unfair to some. You made an offer for the bike, your neighbour accepted it for review, and you both intended to make that agreement, and you are both allowed to do so; it is therefore a viable treaty. Whether someone else thinks it`s right or wrong is irrelevant until it`s unscrupulous.

It is not enough to add the word “consideration” to your contract to make it enforceable. For example, many contracts often have a recital at the beginning, which states that the contract is “for a good and valuable consideration.” Unless there is clear evidence to support this consideration in the contract, this statement is unnecessary. The promise to fulfil an already existing obligation towards the contractual partner should also not be taken into account. [23] However, this rule has been considerably limited by recent case law. The general rule is that if a creditor promises to pay a debt against a fraction of the payment, the promisor does not provide consideration for the promise when paying the agreed fraction, as this is only a partial performance of a contractual obligation already due. [24] [25] Therefore, the debtor remains liable for the entire amount, since it cannot force the debtor to accept less. A striking example is Stilk v Myrick, where Stilk, a sailor, agreed with Myrick to sail his boat to the Baltic Sea and return for £5 a month. During the trip, two men deserted. Myrick has promised to increase Stilk`s salary if Stilk agrees to fulfill his contract in the face of desertions.

Stilk agreed, and on his return to port, Myrick refused to pay him the extra salary. It was concluded that Myrick`s new promise was unenforceable because the consideration stilk had set aside for fulfilling an obligation he already contractually owed to Myrick was not a good counterpart to Myrick`s promise to increase his salary. [26] In Williams v. Roffey Bros & Nicholls (Contractors) Ltd.[29] However, the stringency of this rule was severely restricted. [29] The Roffey brothers signed a contract to renovate an apartment building at a fixed price of £20,000. They assigned carpentry work to Williams. It turned out that Williams was threatened with financial difficulties and could not finish his work on time. This would have violated a clause of the main contract and resulted in a penalty.

Roffey Brothers offered Williams an additional £575 for each completed apartment. Williams continued to work on this basis, but it soon became clear that Roffey Brothers would not pay the extra money. He stopped working and sued Roffey Brothers for the extra money for the eight apartments he had completed after promising an additional payment. .