Consideration, Contractual Terms & Mere Representations : Law

Consideration

• Exchange of promises between parties

• For a promise to be enforceable under English law, “Something Of Value” must be given in return for the promise

• The “Something Of Value” is known as consideration

Executory Consideration

• When both parties promise to perform an obligation in the future.

• Neither party has performed their promise yet.

• Common in bilateral contracts.

• Example: promising to pay for goods and deliver them next week.

Remember: Executory = promised, but not yet performed.

Executed Consideration

• When a party has performed the act required in exchange for a promise.

• Common in unilateral contracts.

• Example: completing a task in return for a promised reward.

Executed = performed or completed.

Adequate Consideration

•The market value or, consideration equivalent to whatever is promised

•The law is only concerned that the consideration is Sufficient and NOT Adequate.

Sufficient consideration

•Consideration which is of some value in the eyes of the law, however little ( Even a Penny )

•The law is only concerned that the consideration is Sufficient and NOT Adequate.

Mere Representations

• A statement made during contract negotiations that is not intended to be a contractual term.

• If false, it does not automatically amount to a breach of contract.

• A false representation may give rise to a claim for misrepresentation.

• Whether a statement is a term or representation depends on factors such as its importance, the parties’ intentions and the circumstances.