Here, the essential condition is that the promisor was given something specifically to induce the promise being made. 2) Under Bargain-for-Exchange theory of consideration, adequate consideration exists when a promisor makes a promise in return for something else. For example, promises that are purely gifts are not considered enforceable because the personal satisfaction the grantor of the promise may receive from the act of generosity is normally not considered sufficient detriment to constitute adequate consideration.
There are two different theories or definitions of consideration: Bargain Theory of Consideration and Benefit-Detriment theory of consideration.ġ) Under the Benefit-Detriment theory, an adequate consideration exists only when a promise made to the benefit of the promisor or to the detriment of the promisee, which reasonably and fairly induces the promisor to make a promise for something else for the promisee. To be legally binding as a contract, a promise must be exchanged for adequate consideration.
If a promise is breached, the law provides remedies to the harmed party, often in form of monetary damages, or in limited circumstances, in the form of specific performance of the promise made.Įlements - Consideration and mutal assentĬontracts arise when a duty comes into existence, because of a promise made by one of the parties. Contract law is generally governed by the state Common Law, and while general overall contract law is common throughout the country, some specific court interpretations of a particular element of the Contract may vary between the states. Possible remedies for breach of contract include general damages, consequential damages, reliance damages, and specific performance.Ĭontracts are promises that the law will enforce. In some states, element of consideration can be satisfied by a valid substitute. The basic elements required for the agreement to be a legally enforceable contract are: mutual assent, expressed by a valid offer and acceptance adequate consideration capacity and legality. An agreement between private parties creating mutual obligations enforceable by law.
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