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Contract law





                           Consideration




               All simple contracts must be supported by consideration.  However, contracts made
               by deed (specialty contracts) do not require consideration unless the terms of the
               agreement require it.

                             Consideration is an act or forbearance (or the promise of it) on the part
                             of one party to a contract as the price of the promise made to him by
                             the other party to the contract. DUNLOP PNEUMATIC TYRE CO. v
                             SELFRIDGE 1915

                             Put more simply, it is the price by which one party bought the other
                             party’s act or promise.


               Valid consideration

               Both executed and executory consideration is capable of being valid consideration.


               Executed consideration

               Executed consideration is consideration provided at the time of the agreement.  It is a
               performed act in exchange for a promise.


               Executory consideration

               Executory consideration is provided when the party agrees to do something in the
               future at the time of the agreement.  It is a promise given in exchange for a promise.


               Sufficient but not adequate

               Consideration must be sufficient but need not be adequate.

                    Sufficient consideration is consideration which is capable of being given a
                     value.


                    Inadequate consideration is unequal consideration.  The parties have freedom
                     to contract under any terms they wish and a court will not attempt to make a
                     contract a fair bargain as long as there is some identifiable value.














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