Consideration is considered insufficient if it contains an unnecessary object or a false obligation The quantity or service offered as compensation must have a monetary value that the court can recognize. A factor that violates government policy, such as human trafficking, is considered inadequate. The consideration is not considered sufficient by the court if: Suppose Phil offers George $500 if George quits smoking for a year. Is Phil`s promise binding? Since George presumably benefits by making the deal and sticking to it – his health will surely improve if he quits smoking – how can his act be considered a legal disadvantage? The answer is that there is leniency on George`s part: George has the legal right to smoke, and by not committing to it, he suffers a loss of his legal right to it. This is a legal disadvantage; The consideration does not require any real disadvantage. The Office of the General Counsel (OGC) reviews opinions to ensure they are legally adequate. There are conditions that the counterparty must meet in order to have sufficient legal value. A party cannot promise to do something if there is already a legal obligation to do so. A police officer cannot receive a reward for the capture and arrest of an outlaw. The promisor must perform an action to which he is not normally obliged. A police officer cannot hire independent security services for his neighbourhood while on duty in his regular job.
He already has an obligation to secure the neighborhood. The contribution need not be substantial, but must be mutually agreed and legally sufficient. Legally sufficient means that the valuation includes one of the following: the consideration must be equivalent for both parties; Nominal or symbolic values are generally not considered valid. For example, most courts would not consider a dollar as sufficient consideration for a brand new Ferrari. The amount offered for a bond is called a counterparty. The counterpart must be “something of legal value” to be legally sufficient. Five years after Labriola`s tenure, the Pollard Group asked him to sign a non-compete agreement and a non-disclosure agreement requiring Labriola not to accept employment with a competitor 75 miles from Tacoma, Washington, for a period of three years. The problem with the new anti-competitive agreement is that it did not contain sufficient legal consideration. But what if a grandmother gives her grandson a ten-dollar bill for his birthday? Does this mean that the grandmother and grandson signed a legally binding contract? The grandmother gave the grandson something valuable, and he accepted it, but there is no contract, because the grandmother did not get anything from the grandson in exchange for her money.
This has not been taken into account. Have you ever agreed to do something for a fee? Have you ever paid to park your car in a parking lot? Have you ever bought something in a store? If you answered yes to any of these questions, then you were party to a contract, a type of agreement that is legally binding and enforceable for the people who enter into it. When you sign a contract, you may ask yourself, “What`s in it for me?” The answer is consideration. Consideration is essentially what you get out of a contract. In our previous example, Mr. Smith was granted a functional toilet after signing a contract with Ms. Smith. Jones and Jones received $295 from the same contract. When you buy food at the supermarket, your consideration is the food you bought, and the supermarket consideration is the money you paid them.
In a famous example, football player Patrick Mahomes signed a quarterback contract with the Kansas City Chiefs. His counterpart was $500 million, and the Chiefs` counterpart was his promise to play football for them for twelve years. Not amenable to settlement by agreement and satisfaction is the situation in which a party has a pre-existing obligation and is offered an advantage to perform it. If the only consideration offered to the promisor is an act or promise to act to fulfill a pre-existing obligation, there is no valid contract. As Denney v. Reppert (Section 11.4.2 “Consideration: Pre-existing Commitment”), the Promisor does not suffer any legal disadvantage if he promises to assume what he is already obliged to do. If a person is promised a benefit for not doing what he is already forbidden to do, there is no quid pro quo. David is sixteen years old; His uncle promised him $50 if he abstained from smoking. The promise is unenforceable: legally, David must already quit smoking, so he promised not to give up anything to which he was legally entitled. As already mentioned, the difficulty arises when it is not clear whether a person has a pre-existing obligation or whether such unforeseen difficulties have arisen that justify the acknowledgement that the parties have amended the contract or completed a novation. What happens if Peter insists on an additional payment to remove a wheelbarrow full of quicksand from the excavation? Admittedly, this is not enough “unforeseen difficulty”. How much quicksand is enough? A consideration deemed reasonable by law to establish a customary agreement between individuals is called sufficient consideration.
It may also be considered sufficient consideration to justify a particular transaction. Another case where there may not be sufficient legal value for a consideration is when someone is already legally required to do something. For example, a police officer cannot receive a reward for catching a criminal because arresting criminals is already part of his or her duties. A consideration is only valid if the service (in this case, the arrest of a criminal) is not normally required of someone. Because our communications communicate decisions and decisions and inform individuals of their rights and obligations under our programs, we must ensure that our communications are legally adequate. The person is already legally obliged to avoid or carry out the acts. Scrooge offers to buy Caspar`s $700 motorcycle for $10 and a brand new fountain pen (valued at $5). Caspar agrees. Is this agreement supported by proper review? Yes, because both have agreed to give up something that belongs to them: Scrooge, money and pen; Caspar, the motorcycle.
As a general rule, courts are not concerned with the economic reasonableness of the consideration, but with its existence. As Justice Richard A. Posner puts it: “To ask if there is something in return is simply to ask if it is an exchange situation and that an agreement has been reached. To go further and ask whether the consideration is reasonable, the court should do what. He is less well equipped than the parties – to decide whether the price (and other essential conditions) set out in the contract are reasonable. Richard A. Posner, Economic Analysis of Law (New York: Aspen, 1973), p. 46 In short, “the courts do not question the appropriateness of the consideration.” Certain elements must be met for the consideration to be considered sufficiently legally valid. Without this legal sufficiency, the consideration as well as the entire contract will be considered void. If the requirement is essentially ethical but not legal, the judge will not consider the consideration sufficient.
A previous factor, such as a participant`s obligation to perform work that it is already legally required to perform or has already completed, is inadequate. Another factor taken into account when determining legally sufficient value is the waiver of certain legal rights. For example, suppose Ms. Jones accidentally breaks a mirror in Mr. Smith`s bathroom while repairing the toilet. To compensate, Ms. Jones offers to replace the mirror and gives her a discount on her services. If he agrees, Mr.
Smith cannot sue Ms. Jones for the mirror at a later date. Finally, in order for the consideration to have sufficient legal value, a party may refrain from exercising a right to which it is entitled, such as waiving the right to sue someone for restitution. For example, let`s say Jamal doughed John`s wings while repairing the car. Jamal apologizes and tells John that he will repair the dent for free and will also give him a 10% discount on the original repair. If John agrees to the deal, he won`t be able to sue Jamal later for damaging the car. Legal suitability means that a lawyer from the law firm has studied the material and decided to comply with new standards and regulations. Despite the fact that sufficient and sufficient reasons require some value for an agreement to be lawful, there is a small difference between them. While reasonable consideration presupposes that an arrangement has fair market value, reasonable consideration considers only value as a test, whether reasonable or not.
The law also states that as long as the obligation of an agreement has some value, it is legitimate, even if it is not appropriate.
