Contract tip – Consideration
In order for a contract to be valid, there must be consideration. Consideration is the value exchanged between the parties to a contract. In other words, each party to the contract expects to obtain some benefit in the contractual deal in exchange for giving up something else.
For example, if you and your friend agree that your friend will mow your lawn for $50, this is a valid contract with valid consideration. You are getting the benefit of a nicely-mowed lawn in exchange for giving up $50, while your friend gets $50 in exchange for expending time and effort to mow your lawn.
On the other hand, if you and your friend agree that your friend will mow your lawn for $0, there is no valid consideration. Even if you make your friend sign a professional-looking document agreeing to mow your lawn for free, this would not be a valid contract because it lacks consideration. Your friend still might mow your lawn out of sheer kindness, but your friend is under no legal obligation to do so.
Always ensure your contracts contain valid consideration. If you want to be certain your contracts contain all the proper elements, please contact us and speak to one of our professionals.