What Is Consideration Of An Agreement

At Roscorla vs. Thomas, Roscorla was awarded a contract to buy a horse from Thomas for $30. After the sale, Thomas Roscorla promised that the horse would be healthy; the horse proved to be evil. It was found that Roscorla was unable to obtain the undertaking, as the consideration for the sale agreement for the purchase of the horse had been concluded at the time of the undertaking; In a sense, the reflection was “exhausted.” [16] The consideration for a promise may be the performance of a contractual obligation owed to someone other than the project. At Shadwell vs. Shadwell, Cayley Shadwell was contractually obliged to marry a third party. His uncle Charles Shadwell promised to pay him $150 a year after his wedding. It was established that Cayley Shadwell`s marriage was a good idea, even though a contract with a third party required him to marry. [36] Systems based on Roman law (including Germany [22] and Scotland) do not require scrutiny, and some commentators feel that they are not necessary and have proposed abandoning the doctrine of reflection[23] and estoppel, which have replaced them as the basis for contracts. [24] However, legislation, not judicial development, was seen as the only way to eliminate this entrenched doctrine. Lord Justice Denning said he was famous: “The doctrine of consideration is too firmly anchored to be toppled by a side wind.” [25] For example, a buyer of goods who has paid $10 in the past. This is not a good thought for the delivery of new goods to make a new contract.

On the other side of the coin, the illegal consideration could be a promise to do nothing, as a party is legally obliged to pay taxes or comply with certain regulatory requirements. Contracts cannot be maintained if a party`s consideration is illegal. In order for a contract to be considered valid and enforceable by the courts, three aspects of consideration must be considered. In the absence of one or more of these elements, the contract does not have the necessary conditions, it could be considered null and void by the Tribunal. Among the appropriate view, the rule that the previous review is not well thought out is subject to the exception discussed by the Privy Council of Pao On v Lau Yiu Long. [17] In this case, their masters felt that previous considerations could be well thought out when: the existing obligations related to employment at will depend largely on state law. As a general rule, the authorization-related employment allows the employer to terminate the worker for a good reason or not at all (as long as the reason, if any, is not expressly illegal) and allows the worker to resign for any reason. There is no obligation to continue working in the future. Therefore, when an employee asks for an increase, there is no problem with the consideration because the worker does not have a legal obligation to continue working. When an employer asks for a reduction in wages, there is also no contractual issue that must be considered, as the employer does not have a legal obligation to continue to employ the worker. However, some states require additional consideration, with the exception of the prospect of continued employment, in order to enforce the employer`s conditions, including non-competition clauses, at a later date.

In general, the courts do not inquire as to whether the agreement between two parties was monetaryly fair – only that each party passed on a legal obligation or obligation to the other party. [29] [30] The issue of the arrangement is the existence of counterparties, not the adequacy of the counterparty.