Consideration in Contract Law

Consideration is an essential element of a contract. It refers to something of value that is exchanged between the parties to a contract. A contract cannot be formed without consideration. Consideration can be in the form of money, goods, services, or anything else of value.

Past Consideration

Past consideration refers to something that has already been done before the contract is made. It is not considered valid consideration because it does not involve any exchange of value between the parties. Therefore, a contract made on the basis of past consideration is not enforceable.

Present Consideration

Present consideration refers to something that is given or promised at the time of making the contract. It involves an exchange of value between the parties and is considered valid consideration. Therefore, a contract made on the basis of present consideration is enforceable.

Future Consideration

Future consideration refers to something that is promised to be given or done in the future. It involves a promise to exchange value between the parties at a later date. A contract made on the basis of future consideration is enforceable if the promise is legally binding and the consideration is of value.

Conclusion

In conclusion, consideration in a contract can be past, present, or future. Past consideration is not considered valid consideration, while present and future consideration are valid. Therefore, a contract made on the basis of present or future consideration is enforceable.