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K0127347 Legal Obligations If we were to look up consideration in a textbook it would fall under the category of contract law. A contract is a legally binding agreement (promise) between two or more parties. Another way of saying this would be: "Agreements that involve one party, or each party, giving or undertaking or promise to the other" Contract Cases and Materials There are four main different areas of contracts: offer, acceptance, consideration and the intention to create legal relations. Consideration is the main area we shall be looking at. An "offer" is the first stage of initiating a contract, for example one party will ask another party if they will partake in an agreement of exchange of services to each other, these service would normally be of benefit to the promisor and detriment to the promisee. The next stage of the contract is "acceptance". This is the actual agreement on the terms of the contract; also it is one party accepting they fully comprehend the contract. Skipping consideration (as we will discuss this in the main body of the essay) the final area of contracts is "intention to create legal relations". ...read more.
This is when event has already occurred, and therefore the promisor, perhaps for various motives, offers a benefit to the promisee in return for it. For example, A is drowning and B saves A, and then later A offers B a reward, this cannot be called a contract instead it is a gratuitous promise; this is not enforceable as the events/promises were not agreed on prehand. The next area of consideration is where the consideration must move from the promisee. This is most common where a "middle man" is involved. For example, if A pays B to get C for some work, there is no consideration with B, this is because B is a third party. The third party is unable to sure because there is no privity of contract between the third party and the promisor. Adequacy in consideration is a fairly large section of consideration. Adequacy means that if a contract is made however large or negligible the amount of consideration it is still adequate in the eyes of the law. An example of this was in the 2Chappell + Co. Ltd. V Nestle Co. ...read more.
The plaintiffs agreed in writing to accept half rent, although the parties intended this should only be during wartime conditions. To conclude I will explore the significance and the necessity for consideration, and then also go on to explain how a "gratuitous promise may be enforceable if a deed is used". "A deed is an instrument that has been signed, sealed, and delivered that passes an interest, right, or property, creates an obligation binding on some person, or is an affirmation or confirmation of something that passes an interest, right, or property." www.butterworths.com A deed is the only exception to when consideration is not required to make a legally binding contract. Another term for a deed is a contract "under seal" however this is an old term for it. Consideration is a necessity which helps to distinguish those promises that the promisor intends to be legally binding from those which are not seriously meant. Consideration reflects a variety of functions and serves several functions. There is much debate that consideration, in law, is just a "mere technicality, irreconcilable either with business expediency or common sense". However at the moment, with exception to deeds, contracts in the United Kingdom are invalid without consideration. 1 (1875) L.R. 10 Ex. 153 2 [1960} A.C. 82 3 (1809) 2 Camp 317 4  KB 130 ?? ?? ?? ?? ...read more.
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