Definition
Valuable Consideration is a legal term that signifies a promise for which a party to a contract has paid or is willing to pay. It is one of the essential elements required to form a valid and enforceable contract. Without valuable consideration, a contract cannot be legally binding.
Examples
- Monetary Payment: When one party offers a sum of money in exchange for goods or services.
- Extension of Time: Agreeing to extend the time by which a debt must be paid.
- Services Rendered: Promising to perform a specific service in exchange for another service or monetary payment.
Frequently Asked Questions
Q1: What constitutes valuable consideration in a contract?
A1: Valuable consideration usually includes money, goods, services, or any other item of value exchanged between parties.
Q2: Is love and affection considered valuable consideration?
A2: No, love and affection are considered “good consideration,” which does not meet the legal requirements for enforceable valuable consideration.
Q3: Can valuable consideration include future promises?
A3: Yes, future promises can constitute valuable consideration, provided they are specific and clearly defined within the contract.
Q4: Why is valuable consideration important?
A4: It is crucial because it makes a contract legally binding and enforceable in a court of law.
Q5: Can valuable consideration be nominal?
A5: Yes, as long as it is something of value, even a small amount can be considered valuable consideration.
- Consideration: A broader term than valuable consideration, which may include non-economic factors such as moral duty or affection that do not necessarily provide legal enforceability.
- Promisor: The party in a contract who makes a promise to do or refrain from doing something.
- Promisee: The party in a contract to whom a promise is made.
- Contract Law: The body of law that governs contracts, including the enforceability of promises and consideration.
Online References
Suggested Books for Further Studies
- Contract Law: Text, Cases, and Materials by Ewan McKendrick
- Principles of Contract Law by Robert A. Hillman
- The Law of Contracts and the Uniform Commercial Code by Pamela Tepper
Fundamentals of Valuable Consideration: Contract Law Basics Quiz
### What must be present in a contract for it to be considered legally binding?
- [ ] Friendship
- [ ] Moral duty
- [x] Valuable consideration
- [ ] None of the above
> **Explanation:** For a contract to be legally binding, it must include valuable consideration, which involves a payment or benefit that has economic value.
### Which of the following does not constitute valuable consideration?
- [x] Love and affection
- [ ] Monetary payment
- [ ] Extension of time
- [ ] Services rendered
> **Explanation:** Love and affection are considered good consideration and do not meet the criteria for valuable consideration necessary for a legally binding contract.
### In legal terms, who is the promisor?
- [ ] The party receiving the promise
- [x] The party making the promise
- [ ] Any third party
- [ ] The lawyer involved
> **Explanation:** The promisor is the party who makes a promise to do or refrain from doing something in a contract.
### Is an agreement legally enforceable if it solely consists of good consideration like generosity?
- [ ] Yes
- [x] No
- [ ] Sometimes
- [ ] Depends on the lawyer
> **Explanation:** An agreement consisting solely of good consideration like generosity is not legally enforceable. It must include valuable consideration.
### Can future promises serve as valuable consideration?
- [x] Yes
- [ ] No
- [ ] Only if in writing
- [ ] None of the above
> **Explanation:** Future promises can serve as valuable consideration as long as the terms are specific and clearly defined within the contract.
### How can valuable consideration be described in a contract?
- [ ] As a moral obligation
- [ ] As a suggestion
- [x] As an economic value exchanged
- [ ] As a favor
> **Explanation:** Valuable consideration is typically described as an economic value exchanged between parties involved in a contract.
### Why is valuable consideration necessary in contract law?
- [x] To ensure the contract is legally binding
- [ ] To keep both parties happy
- [ ] To avoid issues with friends and family
- [ ] To improve public relations
> **Explanation:** Valuable consideration is necessary to ensure the contract is legally binding and enforceable in a court of law.
### When does valuable consideration become disputed in court?
- [ ] When the contract is too long
- [x] When there is an issue with the economic value exchanged
- [ ] When both parties agree
- [ ] If the parties know each other well
> **Explanation:** Valuable consideration is often disputed when there is an issue with the economic value exchanged or when one party does not uphold their end of the agreement.
### Can non-monetary items serve as valuable consideration?
- [x] Yes
- [ ] No
- [ ] Only in some countries
- [ ] Never
> **Explanation:** Non-monetary items can serve as valuable consideration as long as they hold economic value, such as services or goods.
### What is a common feature of both promisor and promisee in a contract?
- [x] They both must provide consideration
- [ ] They must be friends
- [ ] They must work together previously
- [ ] None
> **Explanation:** Both promisor and promisee must provide consideration for the contract to be legally enforceable.
Thank you for exploring the concept of valuable consideration in contract law. Keep expanding your legal knowledge for a more confident professional journey!
