What is Consideration Law in Austin?
Consideration In Business Law Austin. Generally defined, consideration in terms of business law is a performance, forbearance, or promise that is bargained by a promisor in exchange for their actual promise. This is also considered to be the top element of any business contract. If there is no consideration between both parties, the contract will not be able to be legally enforced. For example, if someone used money to purchase a piece of fruit, this means that that same piece of fruit is the merchant’s consideration, while the money is the buyer’s consideration.
Rules of Consideration
The most common rules of consideration, by law, are as follows:
*Consideration is required to move per the desire of the promisor
*Consideration may also move from the promisor to another individual
*Consideration is able to be in the past, present, or future
*There is no need for consideration to be adequate
*Consideration is required to be real rather than illusory
*Any acts that are deemed to be immoral or illegal will never be considered
There are also some instances in which courts will step in and state that a contract cannot be legally enforced. This is because they will generally find that it lacks consideration. Some scenarios of this include the following:
*One party was already legally obligated to perform
*The promise essentially amounts to a gift rather than a contract
*The exchange itself is for “past consideration”
*The promise that has been bargained for is illusory
Consideration In Business Law Austin. Oftentimes, there are many contracts that provide a recital, or statement at the beginning of the contract itself, that the contract is being entered into “for good and valuable consideration, the sufficiency of which is acknowledged,” or any other statement to that effect. Those who write these kinds of contracts typically believe that by simply stating that consideration exists, all requirements of contractual consideration will be fulfilled. This, however, is not the case. In fact, in many states, these such recitals don’t actually prove anything at all. Essentially, saying that there is consideration doesn’t actually mean that consideration exists.
Many legal scholars agree with the fact that any contract doesn’t need to include anything other than a simple statement that the parties agree to all terms. The only exception to this involves contracts that are signed by only one party, such as the following:
In terms of these types of contracts, a recital that there is sufficient consideration should always be included due to the fact that it isn’t necessarily self-evident that any kind of bargained-for exchange has actually occurred.