Contract Bargain Element
You can ask our solicitors for advice on contract bargain element using the question box on the front of our website or the following article may answer your questions.
When a contract is formed, for it to exist and be valid it must contain three important elements; an agreement, consideration (contract bargain element) and a genuine intention to establish some kind of legal relations .
The agreement is formed when there is an offer in place and this offer is accepted. Legal relations make a clear differentiation between entering into a legally binding contract and the sort of informal agreements that you make in everyday communications with friends and relatives. The contract bargain element aspect of the contract is ‘consideration’, and this is crucial in forming any contract.
Each party entering into a contract must offer some benefit which is a bargaining tool used in the process of negotiating. Furthermore, each party will have to provide something of value in return to the other party, whether this is of a monetary value, property or a service of some kind.
Consideration in contract law is complex but the law deems a valuable contract bargain element to mean something such as an interest, right, benefit or profit to one party or with some detriment, loss or responsibility given to another party signing the contract.
What about Past Contract Bargain Element?
As a general rule, it must be said that past consideration cannot be classed as consideration in contract law. As an example, this may occur when someone pays a company for doing some joinery work before a promise was made.
In this case, an act cannot mean that consideration was made for the promise. In other instances, problems can occur when a particular act is undertaken upon the request of a person making a promise. Consideration can occur provided that both parties understand that some form of payment will be needed for the products or services that are provided by the company.
Equal and Adequate Consideration
When contracts are being explored in law, it will not factor in to any decision whether bargain or contract bargain element is good or bad. The only requirement that must exist is that the contract bargain element should have some monetary value.
Conducting existing duties cannot be classed as consideration unless the contract extends beyond the remit of existing duty. If an existing promise does not extent further than what is normally expected of an individual, consideration cannot be used.
Promises and Duty
Often, it follows that a promise or the completion of existing duties under a contract was already owed to another party before a new contract is created, this cannot be used as consideration for any future promise by the same individual. This is because an individual who owes a duty to perform a specific obligation will still owe a duty even if a new agreement is drafted.
If this first agreement was permitted in a legal sense, then the original contract would in effect be void due to lack of consideration and the lines would become blurred between the old contract and the new one.
As an example, if there was a contract between an employer and an employee, the employee would carry out their duties in return for wages from their employer. Before the employee completes their promise, the employer makes a promise of a bonus if the work is completed by a specific date.
In this instance, the employer is paying a higher fee for the same amount of work but there is an additional payment that the employer makes on a voluntary basis. However, this example would not constitute contract bargain element if the employee realised that the employer wanted the work done in a certain timeframe and they asked for the bonus if the work was completed by the deadline.
Debt Part Payment
If someone makes a promise to not enforce a debt in its entirety, this cannot be legally enforced. The only exception to this rule would be if the debtor provided new consideration. The law would say that part payment of a debt would not amount to consideration because there has to be something extra than money because this was owed anyway.
If you need additional advice or information on consideration in contract law, it is strongly recommended that you seek advice from a suitably qualified and professional solicitor. There are many different elements to consideration which would warrant review on a case by case basis.