Hi and welcome to TransLegal's lesson of the week. Today we're going to be talking about consideration in contract.
Now this is a commonly confused term because it really doesn't exist outside of common law contract, but in the context of contract law consideration is a vital element required to form a contract. Along with an offer, acceptance and the intent to create legal relations, consideration is fundamental. As a general rule, a contract is not enforceable if there is no consideration.
So what is consideration?
Well it's the thing that's done or given or the promise to do so by one party of the contract in exchange for the act or promise of the other party to the contract. The idea is that in order for a party to enforce a promise they must be given something quid pro quo for it, which begs the question, what's quid pro quo?
Well quid pro quo is a Latin expression which means something for something. It just signifies an equal exchange or substitution that one makes with another in return for something done or given or promised.
So consideration therefore is payment in any form under a contract, whether it's cash, shares, property, bananas, etc.
That's it for today. If you have any questions about consideration, please leave them in the comments section below and myself or one of my colleagues will be happy to get back to you. Thanks.