Few professional agreements (particularly in the construction industry) are one-sided. There is almost always a promise exchanged between all parties. This why, whenever clients come to us here at The Triangle Law Group with questions regarding disputes with their contracted partners in Raleigh, one of the elements of their cases we review first is that exchange of promises. You go into a contract negotiation fully expecting such an agreement to be mutually beneficial. Without mutual benefits, a contract can often be declared void.
The word “consideration” is often referenced in the world of contractual law. The Judicial Education Center for the University of New Mexico defines “consideration” as the element providing the value for you and another party to enter into a contract. Something of significance must be promised in exchange for a specified action or non-action. For consideration to be considered legally sufficient, it must involve you either promising to perform an action that you have no prior legal duty to do or obligation to undertake, or to refrain from exercising a legal right that you would otherwise be entitled to exercise. An example of this would be an agreement with a supplier. In this case, the consideration is the promise of the supplier to provide you with materials, and your promise to pay for them in return.
There are certain situations where consideration from one side may not need to be present in order for a contract to be enforceable. These include:
- Where goods or services are considered charitable contributions
- Where an agreement is made in compensation for past service
- Where remission is given by the promisee on performance of the promise
- Where the promise is to resolve a time-barred debt
More information related to understanding the elements of a contract can be found here on our site.