LG324DLF2A2020 Contract Management & Law
2) What is adequate consideration? Who determines adequate consideration?
Adequate consideration is when one party offers something of equal value of either action or money and in return the other party receives an item or action. One good example of this would be someone signing a contract to pay one party a sum of money and in return getting a car. The person that determines adequate consideration from my understanding is that it should be mutual between the parties otherwise a deal would not be made if one side does not thing that one item is worth as much as it is being asked for.
8) Do minors have the capacity to contract? If so, how?
Normally minors do not have the capacity to enter a contract. If they do want to enter a contract, they normally need to have a co-signer, parent, or guardian, that does have capacity. A minor however does have the ability to sign into a contract if and only if it is for essential items.
Brown, G. W., & Sukys, P. A. (2013). Business Law with UCC Applications (13th ed.). New York, NY: McGraw-Hill Education, pg.193, 212-214
1. What is consideration?
Consideration is the exchange of anything of value and is a necessary element to have a binding contract. (Brown & Sukys, 2013, p. 191) Offering a service for free does not supply either party with consideration and therefore can not be used to create a legally binding contract. The nature of consideration is that of mutual gains and losses between both parties of an agreement. If I were an offeror making a proposal on a contract opportunity, every cost savings I give the offeree in my proposal to become the lowest offeror and receive the contract is also profit that I am giving up to be competitive.
8. Do minors have the capacity to contract? If so, how?
Contracting with minors is somewhat of a grey area, but it can happen. There are special rules to know about when contracting with a minor and these special rules typically work in favor of the minor. Contracts that are entered into by a minor are voidable at any time by the minor. (Brown & Sukys, 2013, p. 211) This is also applicable when a minor contracts with another minor. When the minor invokes their right to voiding the contract, that minor is entitled to give back everything given to them by the other party, even if what is given back is now in a destroyed or damaged state.
References Brown, G., & Sukys, P. (2013). Business Law with UCC Applications, 13th Edition. New York: McGraw-Hill Irwin.