Home > Business Group > Question and Answer

Question:

Answers:

1. 
   krishna-agrawala Teacher
   Graduate School

   eNotes Editor

   Laws of contract around the world stipulate that for a contract to be legally enforceable, must include a consideration in return for an obligation specified for one or more party to the contract. This means each party must agree to give or do something in return for what they receive as per the terms of contract. This provision is designed to exclude from the scope of law of contract, the promises the promises made by people to others out of love, compassion, or others relationships of personal nature. This if I promise a friend that I will accompany him to a movies in the evening, but due to some unexpected developments later decide not to do so then my friend cannot sue me for breach of contract, as there was no consideration promised to me in return for my obligation.

   The phrase "consideration need not be adequate" refers to the fact that lay only requires that there should be a consideration. It does not require that this consideration should be adequate compensation for the what is given or foregone by the other party. At times this absence of requirement of adequacy of compensation, is misused to circumvent the provision of consideration. For example, a person may donate a property worth millions of dollars by selling it at a nominal price of just 1 dollar.

   Rate answer:

   • Flag as inappropriate

   Posted by krishna-agrawala on Saturday November 7, 2009 at 9:14 PM