What is Consideration in a Contract?

Fri, Nov 13, 2015

General Legal Issues

5480863464_5dd73d1199_bWhen it comes to contracts, consideration means what both parties will receive by entering into the contract.

For example, I sign a contract to buy a house and that’s what I get, while the seller gets my money. A contract could also say that due to a small exchange of money now, I won’t sue for more later. We both got something in return in that type of contract also.

Consideration is a necessary part of every contract. However, it is not the only part that makes it binding and legal—other parts are necessary.

A binding contract need not be written. An oral contract can sometimes be legally binding, but may be harder to prove. That is why it is recommended that all legal contracts be written. In addition, there are many types of contracts that are required to be written to be legal. Thus, it is always good to have contracts you are using reviewed by an attorney. You don’t want to be caught in a bad contract or be using an invalid one that doesn’t protect your interests and rights.

It’s important to know the facts around the idea that you can get out of contracts within three days if you change your mind. This is simply not true for all contracts. Either the contract must state the ways you can get out of it or it must be the type of contract you are able to get out of in three days. For instance, you can often get out of door-to-door sales contracts you might sign within 3 days if certain conditions are met. However, you aren’t able to get out of all contracts that easily.

Be sure you always read every contract, including the fine print, and ask questions. Don’t be afraid to refuse to sign something you are unsure of, especially for major purchases or decisions. It’s better to be safe than sorry.

Attorney Christopher D. Smith, Sr. is designated a Board Certified Consumer Bankruptcy Lawyer by the American Board of Certification.  SmithLaw is located in Lakewood Ranch, Florida.  Attorney Smith concentrates on bankruptcy, civil litigation, probate, estate planning, and elder exploitation cases in the Sarasota and Bradenton area.  Call 941-202-2222 to learn more.  SmithLaw offers free consultations in certain areas, including consumer bankruptcy, probate, and personal injury matters.

Image: Some rights reserved by Steve Snodgrass

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