Consideration in a Contract

What is a consideration in a contract?

Consideration is the exchange of promise or promises between parties entering a contract. It can also be equivalent to an amount that a party promises to pay for a product or service.

The presence of consideration must be proven between all the parties in the contract. Therefore, every party can be called as promisee.

It is also the responsibility of the person who wants to enforce the contract to show that there really is considered among or between the parties.

Moreover, considerations are only necessary for informal contracts.

What should a valid consideration contain?

Consideration doesn't have to pass the adequacy test. This means that the value of consideration is unimportant as long as it is of value to the promissory. Therefore, in terms of a monetary amount, there is no small or large amount of consideration.

This is expressed in the case of Thomas v Thomas (1842) QB 851.

What are the valid aspects of a consideration? 

Past Consideration 

It should not be past consideration where it means that the parties to the contract must perform the obligations that they agreed upon within the same contract or agreement. A valid consideration must not be part of a pre-existing obligation of a party or parties to a contract as this would be past consideration.

Therefore, parties to a contract must perform their promise and obligation within the current contract. The case of Stilk v Myrick (1809) illustrates past consideration.