Legal And Ethical Environment For Business

Legal And Ethical Environment For Business

READ AND SUMMARIZE CHAPTER 11 400 WORDS

Meaning of Consideration
Consideration is something of value, and need not be commercially adequate to the promise, that is
given or promised by the party seeking to enforce the contract and it is usually an essential element in
the formation of a valid contract. Consequently, the parties are free to make their own bargains and
the court will not intervene or inquire into the commercial viability of adequacy of the consideration
that was given as was seen in Thomas v Thomas (1842) 2 QB 851. Consideration is essential in most all
agreements with exception in respect to formal contract (deeds), and in its simplest meaning is ‘something
of value that is given by the parties to each other under their agreement. Similarly, consideration must not
be too vague or indefinite as is illustrated by the case of White v Bluett (1853) 23 LJ Ex 36 and must be
sufficient as was seen in Eastwood v Kenyon (1840) 11 AD & E1 348 and Wigan v Edwards (1973) ALR
497. Essentially consideration is the price or value of the promise for which the common law requires
that a price is to be paid for every person’s promise before the promise will be enforced at law.
Download free eBooks at bookboon.com
Business Law – Now!
Part I170

Legal And Ethical Environment For Business

Consideration
Consideration therefore is regarded as something that is done or promised to be done by one party in
exchange for something to be done or promised to be done by the other party. In this context mutual
promises are the fundamental basis of consideration, which is generally described as an exchange for value
for value. Traditionally, the law required that the parties to an agreement must supply, bring or provide
something that has some real value to each of the parties. Hence this approach to requiring some form
or valuable consideration gave rise to the notion of their existing a bargain between the parties based
on mutual promises. When both parties give or provide such promises at the time that the agreement
is being entered into that leads to the contract then the promises have some value and are deemed to
constitute the third essential element, consideration that supports the simple contract.
Accordingly, these respective promises made between the parties to the consideration actually support
the agreement and in turn create or give rise to a legal and binding contract that is enforceable at law. In
respect to consideration it is essential that there is valuable consideration to support the promises made by
both parties and depending on the form or nature of the consideration and the types or classifications of
consideration and hence the promises made and the types or classifications of consideration will depend
on the nature of the remedies available to an innocent party in the event of a breach of the promise
made and where no valuable consideration has been given or provided as promised during the course
of the pre-contractual negotiation.

Legal And Ethical Environment For Business

READ AND SUMMARIZE CHAPTER 12 400 WORDS

2.1 Importance of Consideration
The classic definition of consideration is: ‘A valuable consideration in the eyes of the law may consist
either in some right, interest, profit or benefit accruing to one party, or some forbearance, detriment, loss
or responsibility given, suffered or undertaken by the other’. Simply put, the element of consideration
is about exchange of promises. It is the price paid for the promise and it can be either in for form of
some benefit that is conferred on the promisor by the promise or some detriment or loss suffered by the
promisee. Such an example of how consideration is applied and works in the commercial world is that of
a bilateral contract. In some instances consideration may consist of a promise to settle a disputed legal
action and avoid legal proceedings. In respect to the situation where a claim has been settled the courts
have held that a promise to withhold legal action may be consideration where there is a reasonable claim,
a genuine dispute or there a reasonable prospects for successful legal action.
Consideration is the price you pay to buy the other person’s promise and it is this concept of ‘price paid’
or an “act or forbearance of one party, or the promise thereof, is the price for which the promise is bought;
and the promise thus given for value is enforceable”. In simple terms, consideration is something of value
that is given by both parties to one another under the agreement that they have negotiated and agreed
upon by forming the contract that makes their agreement legally binding and enforceable. Consideration
which is the third essential element in an apparent simple contract can take a number of forms including,
an act for an act; an act for a promise; a promise for a promise; and a promise for an act.
Most simple contracts which form the majority of the contracts entered into a daily and regular basis
require some form of valuable consideration in order for the promise to be enforceable in the courts but
it is not necessary in all contracts such as formal contracts. Formal contracts do not require consideration
because these types of contracts such as deeds and courts of records that take their validity from the way
that they are specifically formed or constructed.
Download free eBooks at bookboon.com
Business Law – Now!
Part I181
Operation of Consideration
12.2 Aspects of Consideration
Consideration is something of value given or promised by the party seeking to enforce the contract.
Consideration may consist of a material item or the doing of some task, or a promise to do something
or it may be a negative act, such as to refrain from doing something under the promise. Consideration
is essential for the enforceability of contracts that are not under seal (formal contracts) and it is the
bargain element in a contract.
The protection of the law is not afforded or provided to gratuitous promises (gifts) as they are generally
not supported by any form of valuable consideration and generally are based on promises that the courts
will not interfere with or involve itself such as a father promising to pay his son $1,000 if he passes his
final examinations in business law and then he does not pay will not be enforced in a court as it is only
a moral obligation and has no legal obligation attached to that promise

The post Legal And Ethical Environment For Business appeared first on Essay Solving.

Write my Essay. Premium essay writing services is the ideal place for homework help or essay writing service. if you are looking for affordable, high quality & non-plagiarized papers, click on the button below to place your order. Provide us with the instructions and one of our writers will deliver a unique, no plagiarism, and professional paper.

Get help with your toughest assignments and get them solved by a Reliable Custom Papers Writing Company. Save time, money and get quality papers. Buying an excellent plagiarism-free paper is a piece of cake!

All our papers are written from scratch. We can cover any assignment/essay in your field of study.