Consideration - Business Law
Consideration
For any contract to be valid, consideration is needed. Consideration is the benefit or detriment in the exchange process. If X goes to the shop to buy a bag of rice. And he takes it to the cashier. X pays the money for the bag of rice. He looses his money but gains a bag of rice. The shop on the other hand looses the bag of rice but gains the money.
Consideration need not be adequate and has to be nominal. A peppercorn is still a peppercorn. So if Y sells his book for Rm 1.00 and the book actually cost Rm 200.00. By paying Y Rm 1.00 and he accepts, then a contract exists.
If someone agrees to sell you a piece of property for Rm 300,000.00 and you pay a deposit of Rm 1,000.00, a contract exists. If you cannot pay the balance of the purchase money, then the seller has the right to forfeit the Rm 1000.00 deposit.
If the seller refuses to sell the property to you, then you can sue him for breach of contract. Apply to the court for Specific Performance to......
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