What is contract consideration?

Contracts may seem to be such simple things; you and/or your company agrees to offer a service in exchange for a benefit from another party in Gainesville. Yet essential elements must be present in order for a contract to be considering legally binding. For example, the service that you provide and the benefit you recieve for it are both classified as consideration. What is consideration? The National Paralegal College defines it as an object, act or promise of value that a promisor recieves from a promisee in exhange for its promise. Indeed, according Section 13-3-1 of the Code of Georgia, consideration must be present for a contract to be valid. 

There are actually six different types of contract consideration. These are: 

  • Past consideration: Something is done by the promisee at the desire of the promisor before the date of the agreement
  • Present consideration: Consideration which moves simultaneously with the promise
  • Future consideration: Consideration from both sides is to move at a future date

Say that you run a cleaning company. You agree with a client to provide cleaning services for its office building during the month of August, and it will pay you for those services in September. This would be an example of past consideration. Present consideration would have you being paid as services are rendered, while future consideration would be your agreeing to come clean the office building in the future, after which time the client will pay you. 

There are a few rare examples where a contract may be enforced when limited or no consideration is offered to one side. These include cases where an an agreement is made out of material love and affection, a contract is made involving debt, or an agreement deals with the exchange of volunteer or gifted services. 

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