What Is past Consideration in Contract Law

Considerations from the past that were not provided to make a promise are „past considerations” and generally do not lead to a binding contract. If the promising person received the consideration before the date of the commitment, the consideration is a previous counterparty or an executed counterparty. For example, imagine going for a walk and seeing another person fall and get hurt. You then hurry to help the injured person, bring them home and help them heal. To show appreciation, the other person promises to pay you $1,000. The help you provided to the injured person would be considered a past consideration. Although you were not legally obligated to help them, you felt morally obligated, and your fulfillment of this moral duty led you to be paid. However, some courts in the United States may challenge a nominal consideration or a virtually zero consideration. Some courts have since considered this a deception. Since contractual disputes are usually resolved by state courts, some state courts have concluded that the mere provision of $1 to another is not a sufficient legal obligation, and therefore there is no legal consideration in this type of business, and therefore no contract is concluded. However, this is a minority position.

[31] Knowledge of previous considerations is very important. Because in everyday life we conclude such a contract, in which we can not get consideration, because it is taken into account in the past. Past considerations, which are usually not satisfactory to make a promise restrictive. In such a case, the promising can see through his promise a moral responsibility that is not a consideration, at least he receives nothing but compromises for his promise, because he now has it, before the promise is made. Past consideration is defined as an action taken before the conclusion of a contract. It is a consideration that is already given, or an action that is already performed and therefore cannot be induced by the thing, action or promise of the other party in exchange. The term „past reasoning” refers to a measure that was taken before the new promise that is at stake and that is attempted to be implemented, or a promise that has been made. Under the law, a previous audit cannot be a consideration for the new contract, as it was not given for that new promise. „A previous consideration is, in fact, not a consideration at all; That is, it does not bring any advantage to the promiser and does not harm the promiser over his promise. It is an act or abstention in the past that has benefited a man without incurring any legal liability. William R. Anson, Principles of Contract Law 149 (1919).

Civil law systems take the approach that an exchange of promises or a correspondence of wills alone and not an exchange of precious rights is the right basis. So if A promises to give a book to B and B accepts the offer without giving anything in return, B would have a legal right to the book and A could not change his mind to give it to B as a gift. However, in common law systems, the concept of culpa in contrahendo, a form of confiscation, is increasingly used to create obligations in pre-contractual negotiations. [27] [28] Forfeiture is a doctrine of fairness law that provides for the creation of legal obligations where one party has given an assurance to another and the other has relied on insurance to its detriment. A party that is already legally required to provide money, object, service or forbearance will not take into account if it simply promises to comply with this obligation. [32] [33] [34] This legal obligation may arise from the law or from an obligation under a previous contract. At common law, it is essential that both parties offer consideration before a contract can be considered binding. The doctrine of consideration is not relevant in many jurisdictions, although current business relationships have viewed the relationship between a promise and an act as an expression of the nature of contractual considerations. If no consideration is found, no contract is concluded. In Currie v. Misa [1], the court stated that consideration was a „right, interest, profit, advantage or abstention, disadvantage, loss, liability”.

Therefore, the consideration is a promise of something of value given by a donor in exchange for something of value given by a promisor; And generally, the question of value is a good, money or a stock. Act with indulgence, . B as an adult who promises to quit smoking, is only enforceable if you thus waive a legal right. [2] [3] [4] A promises B not to sue him if he pays him 500 rupees. The abstinence of A is the counterpart of the payment of B. In India, consideration is a good consideration in the past. It is enough to support a promise. Paragraph 2(d) of the Contracts Act clearly states that the consideration may be past, present or future. Therefore, an agreement based on previous considerations is quite valid in India. Existing employment obligations depend to a large extent on State law. In general, all-you-can-eat employment allows the employer to fire the employee forever or even for no reason (as long as the reason, if any, is not expressly illegal) and allows the employee to dismiss for any reason. There is no obligation to continue working in the future.

So if an employee asks for a raise, there is no problem with the consideration because the employee has no legal obligation to continue working. Similarly, if an employer requires a reduction in wages, there is also no contractual issue with consideration, since the employer is not legally required to continue to employ the employee. However, some States require additional compensation in addition to the prospect of continued employment in order to enforce the conditions required by the employer in the future, in particular the non-compete obligations. A owes Rs 1,000,000 to B, but debts are time-barred under the statute of limitations. However, if A B agrees in writing to pay 50,000, this is considered a valid contract. Consideration is a concept of English common law and is a necessity for simple contracts, but not for special contracts (contracts by deed). The concept has been adopted by other common law jurisdictions. But even according to this modern view, a promise to provide compensation for a past performance will not be enforceable if that benefit was given as a gift, as there is no moral obligation to repay the value of a gift.

For example, if the benefit granted to a person is a gift, the promise of compensation for the benefit cannot be enforced. There is no moral obligation to refund gifts. For example, imagine that you receive a car as a gift for your birthday and later promise to refund it to the person who gave you the car. Their promise cannot be kept because the car was given as a gift. In addition, promises for past consideration are enforceable only if the promettant has benefited in any way from the consideration. The promisor`s debts are not enough to make the promise enforceable. Consideration can be seen as the concept of value offered and accepted by the individuals or organizations that enter into contracts. Anything of value that one party promises to the other when entering into a contract can be treated as „consideration”: for example, if A signs a contract to buy a car from B for $5,000, A`s consideration is $5,000 and B`s consideration is the car. Usually, every day you will find someone who says give me two packs of cookies in a store, you can cure this book in a mail center, someone orders a pizza on Swiggy or Zomato, etc., which is a contract. This means that in everyday life, you cannot come across laws such as the CPI, the constitution, company law, etc.

But you enter into many forms of oral, written, implicit and explicit contracts. That`s why contracts are such an interesting aspect. For a contract to be legally valid, it must have consideration, otherwise the contract is invalid and unenforceable, except in certain situations set out in section 25 of the Indian Contract Act 1872. The traditional rule is that a promise based on moral or prior considerations is an unenforceable promise of gift. See Mills v. Wyman, 3 Pick. 207 (Mass 1825). Systems based on Roman law (including Germany [22] and Scotland) do not need to be taken into consideration, and some commentators consider this unnecessary and have proposed abandoning the doctrine of consideration[23] and replacing it as the basis of treaties. [24] However, legislation, not judicial development, has been presented as the only way to eliminate this deep-rooted common law doctrine . .

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