Consideration
Something with monetary value, voluntarily exchanged for an act, benefit, forbearance, interest, promise, right, or goods or services. In banking, the loan-amount is a consideration, in exchange for the borrower's promise to repay the principal and to pay interest and other charges. In insurance, the insurance company's offer to make a loss good is a consideration in exchange for payment of premium. Essential element of all enforceable commercial-contracts, it does not have to be 'adequate' or equal in value to the exchanged item but must be legal (not in violation of any law). Any commercial contract without a valid (valuable and legal) consideration is invalid and is called 'nudum pactum' (Latin for, naked contract) governed by the legal maxim 'ex nudo pacto non oritur actio' (Latin for, a right of action does not arise from a naked contract). See also good consideration, and valuable consideration.
Something with monetary value, voluntarily exchanged for an act, benefit, forbearance, interest, promise, right, or goods or services. In banking, the loan-amount is a consideration, in exchange for the borrower's promise to repay the principal and to pay interest and other charges. In insurance, the insurance company's offer to make a loss good is a consideration in exchange for payment of premium. Essential element of all enforceable commercial-contracts, it does not have to be 'adequate' or equal in value to the exchanged item but must be legal (not in violation of any law). Any commercial contract without a valid (valuable and legal) consideration is invalid and is called 'nudum pactum' (Latin for, naked contract) governed by the legal maxim 'ex nudo pacto non oritur actio' (Latin for, a right of action does not arise from a naked contract). See also good consideration, and valuable consideration.
.jpg)
.jpg)
0 comments:
Post a Comment