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Consideration can be anything of value (such as any goods, money, services, or promises of any of these), which each party gives as a quid pro quo to support their side of the bargain. Mutual promises constitute consideration for each other. [a] If only one party offers consideration, the agreement is a "bare promise" and is unenforceable.
The leading case is Stilk v Myrick (1809), [3] where a captain promised 8 crew the wages of two deserters provided the remainders completed the voyage. The shipowner refused to honour the agreement; the court deemed the eight crew were unable to enforce the deal as they had an existing obligation to sail the ship and meet "ordinary foreseeable emergencies".
The promise must be real and unconditional. This doctrine rarely invalidates contracts; it is a fundamental doctrine in contract law that courts should try to enforce contracts whenever possible. Accordingly, courts will often read implied-in-fact or implied-in-law terms into the contract, placing duties on the promisor.
Conversely, if A signs a contract to buy a car from B for $0, B's consideration is still the car, but A is giving no consideration, and so there is no valid contract. However, if B still gives the title to the car to A, then B cannot take the car back, since, while it may not be a valid contract, it is a valid gift .
Part I – Introduction; Part 2 – Formation of Contract Chapter 2 – The Agreement, Chapter 3 – Consideration, Chapter 4 – Form, Chapter 5 – Mistake, Chapter 6 – Misrepresentation, Chapter 7 – Duress and Undue Influence
A contract of employment is usually defined to mean the same as a "contract of service". [1] A contract of service has historically been distinguished from a contract for services (contract for the supply of services). The differing terminology implies a dividing line between a person who is "employed" and someone who is "self-employed".
Accord and satisfaction is a contract law concept about the purchase of the release from a debt obligation. It is one of the methods by which parties to a contract may terminate their agreement. The release is completed by the transfer of valuable consideration that must not be the actual performance of the obligation itself. [1]
An option contract is a type of contract that protects an offeree from an offeror's ability to revoke their offer to engage in a contract. Under the common law, consideration for the option contract is required as it is still a form of contract, cf. Restatement (Second) of Contracts § 87(1).
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