12-28-2007, 01:04 AM
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#4
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Forum User
Join Date: Jul 2007
Posts: 65
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Consideration
To add to what has been said, a contract is a binding agreement, that is, it is legally enforceable. It is legally enforceable because it has consideration. Consideration is (according to the Oxford Legal Dictionary): An act, forberance, or promise by one party to a contract that consitutes the price for which he buys the promise of the other. In more understandable terms, if I offer to sell you my car, and you agree to buy it, that is not yet a contract, it is an agreement only. However, if you give me $5 as a deposit for the car and I take the ad out of the newspapers in expectation that you will buy my car, that is consideration from both sides, and therefore, a contract, and you and I are bound by it. It is also an agreement, but it has consideration, and is therefore a legal contract in countries with the English legal system.
I hope this helps a bit.
Isabel
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