Consideration in the Law of Contract Analysis (Essay Sample)

Consideration in the Law of Contract
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The element of consideration is of importance in the law of contract as it is used to determine if a contract is enforceable or not. The significant use of consideration in contract law has led to various interpretations in its meaning and usage. However, from a general definition, consideration can be described as the value of exchange that occurs between parties involved in the formation of a contract. In most instances of contract formation, consideration is of monetary value but in some cases, it can be a promise by one of the parties to perform a specific act in the future. The enforcement of consideration has to be achieved under specific rules that will make it legally binding. The types of considerations are also of importance in understanding the usage of different considerations in contract law (Valente, 2010). Therefore, this paper will look at the rules of consideration along with the various purposes of consideration in contract law.
In the application of the element of consideration in contract law, there are rules that determine if it is enforceable or not. The rules are divided into three categories which dictate that; consideration must be sufficient but does not need to be adequate, past consideration is not regarded as the best consideration, and lastly, consideration should be transferred from the promisee. In the first rule, the terms sufficient and adequate often confuse many people due to the understanding that they represent the same aspect. This might be true but under consideration, these two terms are different in their use. Therefore, ‘adequacy’ is used in its everyday sense while ‘sufficiency’ on the other hand has a clear-cut legal meaning. The second rule which states that a past consideration is not good is explained in the sense that any consideration given before an agreement is reached cannot be enforced. The third rule of consideration is clear on its explanation as it states that the consideration should be transferred from the promise, otherwise no value exchange will have occurred and this would make the contract invalid. Not all promises are considerations and, therefore, the task of determining consideration in a contract is often a complex one as it needs to show that the promise was an agreement that was made in exchange of something. Therefore, the use of the rules of consideration, make it easy in identifying contracts that lack considerations and thus are not enforceable from those that are enforceable (FERDOUS 2009).
There are two types of considerations that are enforceable under the law of contract; executory consideration and executed consideration. In the executory consideration, it is formed when an exchange of promises between the parties has occurred and it is also known as bilateral contracts. On the other hand, the executed consideration takes place when one party offers a promise in exchange for the other party to perform an act or conduct. This type of consideration is normally identified as a unilateral contract. When the promised performance is done, the consideration is thus considered executed. Therefore, in the implementation of these considerations, one should realize that consideration is not only needed for the establishment of a new contract, it can also be used in making effective amendments or discharge an existing contract (Johnson 2015). It is important to consider that consideration does not have to benefit the promisor, it can be of benefit to a third party or it can be some detriment to the promisee. In its identification in a contract, consideration should be distinguished from the reason of contracting or motive. Therefore, consideration in a contract should be identified by the parties involved and should be agreed based on the terms of the contract. In business law, the bilateral type of consideration is usually enforced through the exchange of products and services with money. The exchange of money and services or products is the consideration element. The consideration in the contract law is, therefore, a common element of daily activities that include the exchange of value.
The implementation of consideration in contract law must be separated from the pre-existing duty. There are various scenarios where pre-existing duty cannot be used as a consideration in a contract. One of this includes the performance of a duty imposed by law. In this scenario, consideration cannot be implemented on a basis of a duty that one is imposed by the law to perform. This rule basically applies to public officials who are not to receive or extort money for the exchange of performing their duties. Another instance of pre-existing duty is that of performing a contractual duty which i