Photo AI
(a) Explain the legal term ‘consideration’ - Leaving Cert Business - Question 8 - 2009
Question 8
(a) Explain the legal term ‘consideration’. (b) Outline two other elements of a legally binding contract. (i) (ii)
Worked Solution & Example Answer:(a) Explain the legal term ‘consideration’ - Leaving Cert Business - Question 8 - 2009
Step 1
Explain the legal term ‘consideration’
Answer
Consideration is a fundamental principle in contract law that refers to the value that is exchanged between parties in a contract. It can be seen as a benefit or advantage that one party receives from another. Without consideration, a contract may not be enforceable. For example, if a buyer purchases a CD for €20 from a seller, the €20 represents the consideration from the buyer's side, while the CD is the consideration from the seller's side. In essence, consideration must involve something of value, such as money or goods, that moves from one party to another, thereby validating the contract.
Step 2
Outline two other elements of a legally binding contract.
Answer
(i) Agreement (Offer and Acceptance): For a contract to be valid, there must be a clear offer by one party and an acceptance of that offer by the other party. This mutual agreement indicates that both parties consent to the terms of the contract.
(ii) Intention to Contract: Both parties must intend to create a legal relationship and be bound by the contract. If the parties do not intend for their agreement to result in legal consequences, then it is not a legally binding contract.