In common lawconsideration is anything of value that is held in connection to any existing contract. The substance of consideration can be anything such as money, a promise of change, physical objects or a service. By law it is required for both parties to enter some form of consideration before binding a contract. The benefit of consideration is that it creates an agreeable exchange between two parties for any type of sale or service. As well as insurance of recover for losses due to detriment of promise.
For a form of consideration to be deemed legal by the court system, that item offered as consideration must of some legal value. Any contract that does not contain some form of consideration is not legal in the court system and therefore cannot be enforced. People who enter contracts without consideration have no real guarantee against their business transactions especially in the event of detriment to promise.
For instance if a person offers to sell their car and puts it in writing, but later on changes their mind. As a benefit there cannot be a substantial issue held in court because the agreement held no consideration. However if their was a actual transaction that took place as part of the agreement then a party is liable to find fault. Promissory estoppel is applied to cases like this.
For instance if the same owner wanted to sell their car and agrees to do so under the condition of the other party painting their whole house, if the owner backs out the party has the right to dispute as long as the agreed transaction already took place. The idea of promissory estoppel stops a person from arguing that their promise should be withheld.
The idea of consideration within contracts have been in existence since the the implement of contract law. Contract law was created to safeguard the interest of parties primarily within commercial transactions. The whole purpose of contract law is to ensure that people are holding up their ends of bargains preventing promissory estoppel.
All commercial transactions include some form of exchange, contract law protects the condition of those exchanges from detriment to promise. If a person enters a contract without consideration it will generally only benefit the party initiating the offer. If they happen to back out of a contract although they are in breach of contract nothing is jeopardized or lost.
The party accepting the offer essentially looses nothing either, other than what was promised within a transaction. Promissory estoppel prevents parties from pursuing this matter in court without the element of consideration.
Every contract formed should include consideration to legally bind the contract,this would benefit the interests of both parties. It is understood that a contract without consideration is technically not a contract at all. A party can exit a agreement from a contract with no consideration of detriment to promise,as long as there was no action towards completing the transaction. If a contract is breached with consideration the victimized party has the right to argue the conditions of the contract in court.
They are essentially protecting their rights since they already expressed a vested interest towards the contract. Promissory estoppel prevents a party help responsible for not keeping their end of the bargain, from appealing court order. Elements of consideration have been applied to contract law for this reason and to benefit the interests for people who enter transactions.