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. 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. Conclusion: For a contract to be enforceable, six elements must be present: 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. The disadvantages of a contract are something that one party gives up in exchange for the consideration of the other party.

For example, if a person buys a car from a dealership, the money paid for the car is the person`s disadvantage. Labriola sued the Pollard Group and sought a declaratory judgment annulling the non-compete obligation. A declaratory judgment is used when a dispute has arisen but no damage has yet occurred. Labriola asserted that there was no consideration since it had not benefited from the 2002 non-compete obligation. The trial court disagreed, saying the deal was a valid contract, so Labriola appealed to the Supreme Court. The Supreme Court ruled in favour of Labriola, finding that under the new agreement, Labriola had received nothing more than his continued employment from Pollard Group and therefore had provided nothing in exchange for him. Only the Pollard group benefited. For this reason, the non-compete obligation was found to be unenforceable and Labriola was free to seek work in other printing plants in the Tacoma area.

For example, if A promises to sell B their $50,000 home and B offers to pay only $100, this consideration is unlikely to be «reasonable.» However, if B offers to exchange services valued at approximately $50,000, the consideration will be considered reasonable. (Note that the consideration doesn`t have to be money, but can take the form of anything of legal value.) The consideration can take the form of money, goods, promises, services or something else. It can be something as simple as a promise to do or not to do something. For example, if you enter into a contract with your neighbour in which he agrees not to sue you for the damage you have caused to his property, and in return you agree to pay him an amount of $800, then the amount of $800 is the consideration that your neighbour receives, while his promise not to sue you, is the consideration you receive under the contract. The value of the exchange must be legally sufficient. This means, among other things, that the consideration of each party must be of equal value. In our example, the $295 fee and the work done to repair the toilet were about the same, so the consideration is legally sufficient and the contract is valid. The consideration must also be negotiated. This means that both parties must agree to give up something as part of the contract. In our example, Mr. Smith waived $295 and Ms.

Jones donated her time and plumbing expertise. Consideration is something of value that is exchanged between the parties to a contract. It can be money, work, property or many other things. Both parties must receive consideration for a contract to be valid. If no consideration is included in a contract, the contract becomes invalid and the courts may refuse to perform the contract. Sometimes a contract cannot be considered, even if, on the surface, it seems that the parties are trading something valuable.