Agreements lack consideration: What it means and how it can affect your legal contract
When drafting a legal contract, one of the essential elements that must be present is consideration. Consideration refers to something of value that is exchanged between the parties involved in the agreement. Without consideration, agreements lack validity and are considered unenforceable.
Agreements that lack consideration occur when one or both parties fail to exchange anything of value in the agreement. In other words, one party gives something while the other gives nothing in return. For example, if a person promises to give you a car as a gift, and you make no promise to give anything in return, the agreement lacks consideration.
Consideration is critical because it establishes the mutual intention of the parties involved in the agreement. It helps to ensure that both parties are willing to abide by the terms of the contract. When there is no consideration, there is no binding promise, and the contract cannot be enforced.
It is essential to understand that consideration need not be monetary or tangible. Consideration can also be intangible, such as a promise to refrain from doing something, or a promise to perform a particular service.
In some cases, agreements that lack consideration can be enforced if they are executed as deeds. A deed is a legal document that requires no consideration to be enforceable. However, for a legal document to be a deed, it must meet certain formalities, such as being witnessed and signed by the parties involved.
The lack of consideration can also affect online agreements, such as terms and conditions on websites. Many websites offer free services or products to their users without asking for anything in return. However, if the website later wants to change its terms and conditions, it may be difficult to do so without offering something in return to the users. This is because the original agreement lacked consideration, so there was no binding promise.
In conclusion, agreements that lack consideration are void and unenforceable. Consideration is essential in establishing the mutual intention of the parties involved in the agreement. When drafting a legal contract, it is crucial to ensure that both parties exchange something of value to avoid the agreement being deemed invalid. Always consult with a legal professional to ensure that your agreement meets all legal requirements and protects your interests.