In a bilateral contract—an agreement by which both parties exchange mutual promises—each promise is regarded as sufficient consideration for the other. Until the promisee performed, he or she had provided no consideration under the law.

Search for: Which of the following are examples of consideration?

Each party must make a promise, perform an act, or forbear (refrain from doing something). 2.) Each party’s promise, act, or forbearance must be in exchange for a return promise, act, or forbearance. 3.)

When forming a contract, consideration is needed in order to make the agreement a formal, valid contract. This is one of the three main requirements besides mutual assent and a valid offer and acceptance. Consideration basically refers to the exchange of items or services of value.

And there can be no contract without consideration. Under the Indian Contract Act of 1872, a promisee can provide consideration to the promisor or a third party if the former holds no objection.

When a Contract Lacks Consideration Offer is made for something that already has been done (“past consideration”) and therefore cannot be bargained for. One or more of the parties agreed to something he or she already was obligated to do. A promise was actually a gift, not something bargained.

In the formation of a valid and binding contract, something of worth or value that is either a detriment incurred by the person making the promise or a benefit received by the other person. It is an essential element for the formation of a contract. …

However, as a general rule, a moral obligation does not provide valuable consideration; for example, a promise made ‘in consideration of natural love and affection’ (Brett v J.S.). Nor is a pre-existing legal obligation sufficient to provide valuable consideration, often referred to as ‘past consideration’.

As per section 43CA, if an asset (other than a capital asset), being land or building or both, is sold below the stamp duty value then such stamp duty value shall be deemed value of the consideration and used for the purpose of computing profit and gains from transfer of such assets.

Nominal consideration is an offer from one party of an agreement to another party that doesn’t have any value in relation to the consideration being offered by the other party.

Consideration is required for contract modification under common law but not with the UCC. If you promise to keep a deal open under common law, this is considered an option contract and consideration is required. With the UCC, this must be in writing and made by a merchant as it is considered a firm offer.