CA Foundation Exam > CA Foundation Questions > An executed consideration is _______.a)Consid...
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An executed consideration is _______.
- a)Consideration prohibited by the executive of a company
- b)An act of mutual exchange of promises
- c)An act done is response to a positive promise
- d)An act done in the expectation of a proposal
Correct answer is option 'C'. Can you explain this answer?
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An executed consideration is _______.a)Consideration prohibited by the...
Executed consideration is where the promisor asks for something in exchange for his promise and the promisee provides consideration by giving the promisor what he has requested.
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An executed consideration is _______.a)Consideration prohibited by the...
An executed consideration refers to an act that has already been performed by one party in response to a promise made by another party. It is one of the essential elements of a valid contract. In this context, the correct answer is option 'C', which states that executed consideration is "an act done in response to a positive promise."
Let's further explore the concept of executed consideration and understand why option 'C' is the correct answer:
1. Definition of executed consideration:
- Executed consideration refers to the act or performance that has already taken place.
- It involves one party performing their obligations under the contract after the promise has been made by the other party.
2. Elements of a valid contract:
- For a contract to be valid, certain elements must be present, including consideration.
- Consideration is the exchange of something of value between the parties involved.
- It can be in the form of money, goods, services, or an act performed by one party in response to a promise made by the other party.
3. Executory consideration vs. executed consideration:
- Executory consideration refers to a promise to perform an act or provide something of value in the future.
- Executory consideration involves a future act or performance that has not yet taken place.
- On the other hand, executed consideration refers to an act that has already been performed in response to a promise.
4. Example of executed consideration:
- Let's say Person A promises to pay Person B $500 if B repairs A's car.
- If Person B repairs the car, their act of repairing the car is the executed consideration.
- Once the car is repaired, the consideration has been executed, and Person A is obligated to pay Person B the agreed-upon amount.
In conclusion, an executed consideration is an act that has already been performed by one party in response to a promise made by another party. It is a crucial element of a valid contract, and option 'C' accurately describes executed consideration as "an act done in response to a positive promise."
Let's further explore the concept of executed consideration and understand why option 'C' is the correct answer:
1. Definition of executed consideration:
- Executed consideration refers to the act or performance that has already taken place.
- It involves one party performing their obligations under the contract after the promise has been made by the other party.
2. Elements of a valid contract:
- For a contract to be valid, certain elements must be present, including consideration.
- Consideration is the exchange of something of value between the parties involved.
- It can be in the form of money, goods, services, or an act performed by one party in response to a promise made by the other party.
3. Executory consideration vs. executed consideration:
- Executory consideration refers to a promise to perform an act or provide something of value in the future.
- Executory consideration involves a future act or performance that has not yet taken place.
- On the other hand, executed consideration refers to an act that has already been performed in response to a promise.
4. Example of executed consideration:
- Let's say Person A promises to pay Person B $500 if B repairs A's car.
- If Person B repairs the car, their act of repairing the car is the executed consideration.
- Once the car is repaired, the consideration has been executed, and Person A is obligated to pay Person B the agreed-upon amount.
In conclusion, an executed consideration is an act that has already been performed by one party in response to a promise made by another party. It is a crucial element of a valid contract, and option 'C' accurately describes executed consideration as "an act done in response to a positive promise."
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An executed consideration is _______.a)Consideration prohibited by the executive of a companyb)An act of mutual exchange of promisesc)An act done is response to a positive promised)An act done in the expectation of a proposalCorrect answer is option 'C'. Can you explain this answer?
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