Consideration can be classified as:
(i) executory;
(ii) executed and;
(iii) past consideration.
Consideration may be executory when one promise is made in return for another promise. For example, you (Refer to Figure 2.1) agree to sell a fax machine to B for RM2,000. Here, BÊs promise to pay RM2,000 is the consideration for your promise to sell the fax machine, and your promise to sell the fax machine is the consideration for B's promise to pay RM2,000. These are lawful consideration.
Promises which form the consideration for each other are called reciprocal promise and every promise and sets of promises forming the consideration for each other, is an agreement.
Next, consideration may be executed when one promise is made in return for the performance of an act. For instance, you advertise a reward of RM100 to anyone who finds and returns your lost watch. C finds and returns the watch to you in response to the offer. C's consideration for your promise is executed. Only your liability remains outstanding, that is to pay C the RM100 reward.
Apart from the executory and executed consideration, if a promise is made in return for an act that has already been performed, that act is regarded as past consideration. For example, D found and returned your lost chain, and in gratitude, you promise to reward D RM100. Your promise to reward D is made in return for D's consideration that is past.
(i) executory;
(ii) executed and;
(iii) past consideration.
Consideration may be executory when one promise is made in return for another promise. For example, you (Refer to Figure 2.1) agree to sell a fax machine to B for RM2,000. Here, BÊs promise to pay RM2,000 is the consideration for your promise to sell the fax machine, and your promise to sell the fax machine is the consideration for B's promise to pay RM2,000. These are lawful consideration.
Promises which form the consideration for each other are called reciprocal promise and every promise and sets of promises forming the consideration for each other, is an agreement.
Next, consideration may be executed when one promise is made in return for the performance of an act. For instance, you advertise a reward of RM100 to anyone who finds and returns your lost watch. C finds and returns the watch to you in response to the offer. C's consideration for your promise is executed. Only your liability remains outstanding, that is to pay C the RM100 reward.
Apart from the executory and executed consideration, if a promise is made in return for an act that has already been performed, that act is regarded as past consideration. For example, D found and returned your lost chain, and in gratitude, you promise to reward D RM100. Your promise to reward D is made in return for D's consideration that is past.
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