Consideration: The Foundation of Every Contract

Discuss about the Law for Services or Goods.

Consideration can be said as exchanging something in for any monetary terms for any benefit or any services or goods. It can also be said as to do perform something for the other party or to do something in return. It can take any form that is money, goods, or any type of services, promise to do something. It can be a payment or a reward. It is a base or foundation of every contract. An example of consideration is ‘She will give you ten pounds in consideration of the mangoes you are giving to her’. (FindLaw, 2016) Consideration is considered to be the most important aspect for any contract. These considerations were to be made in the best possible manner so that it is relevant for both the respective parties. Without proper consent from both the parties, considerations is to be decided by the parties in the best possible manner.

Enforceable agreement means in which the other party can legally compel the performance of the other party. Enforceable can also be termed as void .An agreement which is governed by the laws is known as contract. Contract can also be said as agreement + Enforceability.

Jane is going overseas and she wishes to give Jack his Lotus Super 7 sports car to Jack. Jane has just casually offered her Lotus Super 7 sports car, so it should neither be considered as enforceable agreement nor consideration. Jane is not quoting any Price for her car.Jack doesn’t have to give anything in return so there is no consideration that is Jack dosent has to give any monetary consideration to Jane. An agreement just means Offer plus acceptance but a contract means Agreement plus Enforceability.In this case there is just an agreement and not an Enforceable agreement. (Clarke, 2013)

All contracts can be said as Agreements, but all the agreements are not called as Contracts.

Consideration can be said as exchanging something in for any monetary terms for any benefit or any services or goods. It can also be said as to do perform something for the other party or to do something in return. It can be a payment or a reward. It is a base or foundation of every contract. An example of consideration is ‘She will give you ten pounds in consideration of the mangoes you are giving to her’. In this scenario as well, the contract will be conisdered as legal because it is enforceable by law. For this reason, it is to be said that once this enforceablity is termed with the court of law, it becomes legal.

Enforceable Agreements: A Legally Compelled Performance

Enforceable agreement means in which the other party can legally compel the performance of the other party. Enforceable can also be termed as void .An agreement which is governed by the laws is known as contract. Contract can also be said as agreement + Enforceability.

In this case Jack has accepted the offer of Jane to purchase her Lotus Super 7 at a price of $25,000. Even the market value is $25,000. (J, 2016)

Jane offers to sell and Jack accepts, there is a consideration here as Jack accepts what Jane offers to sell. Jack has promised that is he accepts. It is an act  or it can be said as a returned promise.

An agreement can be said as a promise and it forms the consideration. It can be said as an addition of offer and acceptance .In this particular case there is an offer and there is an acceptance. But we can’t call it an enforceable agreement as the agreement is not enforceable by Law. (Solicitors, 2016)

Consideration can be said as exchanging something in for any monetary terms for any benefit or any services or goods. It can also be said as to do perform something for the other party or to do something in return. It can be a payment or a reward. It is a base or foundation of every contract. An example of consideration is ‘She will give you ten pounds in consideration of the mangoes you are giving to her’. Considerations has been one of the major aspects which are to be taken care of in the best possible manner as it would not be right on the both the parties to actually relate to the fact that an agreement is being enforced by law, without any considerations.

Enforceable agreement means in which the other party can legally compel the performance of the other party. Enforceable can also be termed as void .An agreement which is governed by the laws is known as contract. Contract can also be said as agreement + Enforceability. (When is a Heads of Agreement legally enforceable?, 2016)

In this case Jane offers to Sell  Jack her  Lotus Super 7 sports car for $25000.The market value  for this type of vehicle  is said to be  $25000 and Jack accepts.

Jane offers to sell and Jack accepts, there is a consideration here as Jack accepts what Jane offers to sell. Jack has promised that is he accepts. It is an act  or it can be said as a returned promise. Jane, being in need of cash, had decided to sell its car with the help of which she will be able meet all her fiancial needs. For this reason the car was being sold at a price which was way reasonable than its actual market valuation. The car was bing sold at a price of $2,500, in order to make sure that all her fianncial needs are accepted. For this reason it can be said that the agreement between these two parties and hence, it can be cosidered as a a contract.

Contracts: Agreements with Enforceability

An agreement can be said as a promise and it forms the consideration. It can be said as an addition of offer and acceptance .In this particular case there is an offer and there is an acceptance. But we can’t call it an enforceable agreement as the agreement is not enforceable by Law. (Aitchison, 2016)

A shipbuilder has agreed for a contract to build a tanker for the  North Ocean Tankers. The Contract was in US dollars and the contract was not having any clause of currency fluctuations. The construction was halfway completed and then unfortunately the United States devalued its currency by 10 percent. The shipbuilder would make a loss on the contract as the currency has devalued, so to cover the loss its has demanded an extra $3 million or e would stop working further on the project. The buyer on the other hand agreed to pay as he did not have any other option as he already had a charter for the tanker and it was very necessary for the buyer to deliver the things on time. The buyer did not start any action or anything to recover the excess payment he has given to the seller until some nine months after the delivery. (Grace, 2016)

This shipbuilding aspect was one of the most celebrated tasks in United States. The whole payment was being done in US. While constructing the ship, there was a evaluation in the currency of the country by almost 10 percent. Because of this, the manufacturing aspect of the company had to bear certain amount of losses, as the price of the deal was decided at a pre-determined rate.

Contract is said to be an arrangement between two persons or two parties or more than two parties which is enforceable by law  and is binded by an agreement. Different countries have different law agreements. Different types of clauses are there in the contract that is the price clause, the exchange rate price adjustment clause, the payment clause, the barter clause, the delivery clause, the arbitration clause, the penalty clause and others. The buyer will be getting the excess recovery as because of existence of contract between the two parties which has no clause of any currency fluctuation. This is completely a breach of contract which means the party has misunderstood the obligations or they can’t perform or they no longer are willing to perform. In this case the seller has misunderstood the contract and has done act which was not included in the contract Contracts are subjected to currency risks and it involve different currencies ,be it be any currency the parties have agreed on to. The date of conclusion of the contract may or may not be the payment date which could lead to the final price being fixed at a later date .The currency market is very volatile in nature which leads to the designated currency falling or rising. The buyer would only not be legally suit the case if any currency fluctuation clause would have been mentioned.

Statues of limitations are passed by the legislative bodies. When the period of time passes the party or the person cannot file any claim or suit against the person. It varies from country to country. (Clarke, 2013)

The limitation Act of 1958 allows 12 years for child survivors and the people with any disability to make a claim, with age 37 the latest at which a claim can b filled or made. The General Limitation period in Western Australia is three years. The buyer is filling a suit within 9 months. So the buyer does not have any limitations in respect to this.

So the conclusion is the buyer can sue the seller in respect to the above case.

References

When is a Heads of Agreement legally enforceable? (2016). Retrieved August 8th, 2016, from legalvision.com.au: https://legalvision.com.au/heads-agreement-legally-enforceable/

Aitchison, S. (2016). When is a done deal not done?: a legally enforceable contract. Retrieved August 8th, 2016, from Mondaq.com: https://www.mondaq.com/australia/x/291480/Contract+Law/When+is+a+done+deal+not+done+a+legally+enforceable+contract

Clarke, J. (2013). Australian Contract Law. Retrieved August 8th, 2016, from Australiancontractlaw.com.

FindLaw. (2016). Is a verbal agreement legally binding. Retrieved August 8th, 2016, from Findlaw.com.au: https://www.findlaw.com.au/articles/5626/is-a-verbal-agreement-legally-binding.aspx

Grace, F. E. (2016). Northern Territory of Australia Construction Contracts (Security of Payments) Act. Retrieved August 8th, 2016, from feg: https://feg.com.au/

J, G. (2016). Principles of Australian Contract Law. Australia: Lexis Nexis.

Solicitors, S. (2016). The Principles of Contract. Contract, 13.

When is a done deal not done?: a legally enforceable contract. (n.d.). Mondaq. Retrieved August 8th, 2016, from Mondaq.com: https://www.mondaq.com/australia/x/291480/Contract+Law/When+is+a+done+deal+not+done+a+legally+enforceable+contract