Contract Law: Requirement 3 Consideration

Question 1

What is consideration in contract law?

Answer 1

An agreement is not a contract unless both parties to the agreement have paid or prom,ise to pay, a price. The contribution of each party to thye agreement is called a consideration.

Question 2

What forms can a consideration take?

Answer 2

1. The payment of money
2. The provision of goods
3. The provision of a service
4. The undertaking of an onerous obligation
5. Refraining from doing something (ie agreeing not to sue)
6. A promise to do any of these things

Question 3

What is a vague promise?

Answer 3

A vague promise in contract law is a promise with insufficient consideration. That is if you agree to ‘be nice’ in exchange for something.

Question 4

What is a Deed?

Answer 4

A deed is a formal contract. It is considered ‘signed, sealed and delivered’ (as in a mortgage)

Question 5

What is the doctrine of promissory estoppel?

Answer 5

The principle that a priomise will be legally enforceable even if the promisee has not provided consideration for the promise, as long as certain requirements are satisfied.

Question 6

Which contracts need to be in writing?

Answer 6

1. Arbitration agreements
2. Assignements of copyright, designs and patents
3. Assignements of life insurance policies
4. Bills of exchange and promissory notes
5. Cheques
6. Consumer credit contracts
7. Hire-purchase contracts
8. transfers of shares

Question 7

Who does not have legal capacity to enter into a contract?

Answer 7

1. A minor

2. A person lacking intellectual capacity

Question 8

Can a child form a contract?

Answer 8

Yes. A child can form, and enforce a contract.