Legal Article - Business Law

What is Consideration of a Contract?

There are four elements of a contract
  • Offer
  • Acceptance
  • Intention to create legal relations
  • Consideration
Consideration is sometimes the one thing which can affect whether an item is purchased, repaired or serviced. The main consideration can often be the price.

However consideration doesn't always refer to price. It is essentially the substance of the agreement. It must be something of value on either side given and received. Price is the obvious one but the consideration on the other side when buying a car is the car itself.

Although it must be something of value it doesn't have to be a sensible commercial value. So if you want to sell a car or fit a clutch for £1, and both sides agree, then that is fine.

Published: 10 Mar 2011

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