An example of consideration in a contract is when a person makes an offer to buy another person`s car for $1000. The owner of the vehicle accepts the offer and accepts the price. The buyer of the car will exchange the money for the car. (a) the conditions of acceptance substantially modify the original contract; or (b) the Supplier objects within a reasonable time. Contracts are promises that the law will enforce. Contract law is generally governed by the common law of the states and, although general contract law is common throughout the country, some specific judicial interpretations of a particular element of the contract may vary from state to state. Contracts arise when an obligation arises on the basis of a promise by one of the parties. To be legally binding as a contract, a promise must be exchanged for reasonable consideration. There are two different theories or definitions of consideration: the counterpart theory of the agreement and the theory of consideration of resident benefits. The absence of consideration in a contract may exist in the following scenarios: (1) According to the theory of advantages and disadvantages, an appropriate consideration exists only if a promise is made in favour of the promisor or to the detriment of the promisor, which reasonably and fairly causes the promisor to make a promise to the promisor for something else. For example, promises that are pure gifts are not considered enforceable because the personal satisfaction that the giver of the promise may receive from the act of generosity is generally not considered a sufficient disadvantage to warrant due consideration. 2) According to the theory of the counterpart of the exchange of negotiation, there is an appropriate consideration when a promisor makes a promise in exchange for something else.

Here, the essential condition is that something has been given to the promisor to provoke the promise made. In other words, the market theory for exchange differs from the residence advantage theory in that the market theory for exchange seems to focus on the parties` motive for promises and the subjective mutual consent of the parties, whereas in the denacht-advantage theory, the emphasis seems to be on an objective legal disadvantage or advantage for the parties. Nor can the consideration be based on past events. Greta`s cat was caught in a tree. She tried in vain to attract the delicate cat with her favorite food. Slim, a local teenager, noticed Greta looking into the tree and quickly jumped into action. Slim snuggled up to the spruce, grabbed the cautious cat and returned it to its owner`s arms. Greta told Slim she would give him $5 for his good deed. When Slim came to get the money, Greta refused to pay as promised. Slim had no choice but to learn from his lesson. If Slim and Greta had set a dollar amount before Slim`s rescue efforts, he might well have collected.

However, the consideration came after the rescue; It was a past event. For the consideration of a contract to be valid, it must meet certain characteristics: A promise not to do something could be a promise not to sue a party after repayment. Let`s visit Joe and Bill again. After Bill took possession of the scooter, he tried to run away. Bill didn`t notice that the scooter had flipped over. When Bill tried to stop the scooter, he ran into Joe`s mailbox and threw him to the ground. The mutilated mailbox was dilapidated. Joe demanded $100 from Bill in exchange for waiving his right to sue in Small Claims Court. Once Bill spat out the money, Joe could no longer sue for damages. The value of the consideration must be determined objectively.

Joe`s mailbox has some value, no matter how sentimental he feels towards him. Lack of consideration in contract law means that a party had little or no obligation with respect to the terms of the agreement. When entering into a contractual agreement, it is important to formulate the consideration objectively and clearly. As we have learned, a gift or vague promise is not an appropriate consideration. If a party demands payment for an action it is already required to take, the contract is unenforceable. When Pugsley, the pit bull, disappeared, his owners put up “Lost Dog Reward” signs throughout the neighborhood. They offered a hefty reward of $45 for the return of their lost dog. Richard, the local dog hunter, noticed the sign and remembered that he had picked up a dog with the same characteristics on the same day. He called to announce that he was in possession of Pugsley and demanded the reward.

Although a reward has been offered for Pugsley`s safe return, the owners are under no obligation to pay Richard a penny. It`s Richard`s main job as the town`s dog hunter to find and secure stray dogs. Reasonable consideration under contract law means that the value to be exchanged is agreed and reasonable. The terms and value of the agreement must be clear and understood by all parties involved. However, in certain circumstances, certain promises that are not considered contracts may be performed to a limited extent. If one party has relied on the assurances/promises of the other party to its detriment, the court may apply an equitable doctrine of stopping promissory notes to grant the non-infringing party fidelity in order to compensate the party for the amount created by the party`s reasonable reliance on the agreement. Lack of consideration means that one of the contracting parties is in no way obliged, while the other party has all the obligations to act. In general, the courts will not intervene in the contracting parties. Adequacy of the quid pro quo is the doctrine of freedom in reaching a mutually beneficial agreement and means that the parties are free to negotiate as they see fit. A bad negotiation, such as paying too much for a car or hiring an inexperienced house painter, doesn`t make sense. Conclusion: Buyers and sellers have full authority to negotiate at will.

However, there are several cases where a court declares a contract unenforceable because there was no consideration: the court reads the contract as a whole and according to the ordinary meaning of the words. In general, the meaning of a contract is determined by examining the intentions of the parties at the time the contract is drafted. If the intention of the parties is not clear, the courts consider all the customs and practices of a particular business and location that could help determine intent. In the case of oral contracts, the courts may determine the will of the parties, taking into account the circumstances of the conclusion of the contract and the course of transactions between the parties.