Nashville, TN – One of the less obvious forms of contract law that businesses have to deal with is the concept of consideration. This is essentially something of value that needs to be transferred between the parties, and this element is required to have a valid and enforceable contract. There are several ways that consideration is important in contracts between businesses.
Relationships with other parties
A business needs to use the concept of consideration properly in order to have successful dealings with various workers, to develop relationships with other companies, and to hire individuals for temporary work. Both parties often exchange money, their time and labor, goods, or other services. If a court finds that no actual value is exchanged between the parties to the contract, or that the document is redundant because it covers obligations that already exist, then it cannot be considered valid and enforceable. This problem is fairly common in situations where one party has merely promised to do something in the future, with no detriment taken by the other party to the agreement. If a document is merely a promise from one party to the other to do something, this is not a contract.
Common types of consideration in contracts in businesses
Most types of services, goods, or money exchanged in business dealings will count as consideration. Property is another common item that becomes a consideration in a business agreement. A promise can become a type of consideration, but there must still be an exchange of value from both parties. Parties who plan to change the value of consideration in their dealings should look to create contracts they are month to month, or those that can change annually. Commercial leases often follow this kind of pattern. Contracts that are indefinite or for very long periods of time are frowned upon in most situations for this reason.
Breaches of contract and consideration
If one party fails to fulfill their end of the bargain by not delivering goods or services as outlined in the contract, this would be considered a breach. There may be other situations that are a breach where a party misrepresented their ability to deliver value, with no intention of doing so. The non-breaching party can sue for various kinds of damages, such as financial losses directly tied to the breach, anticipated lost profits, and the costs associated with remedying the problem caused by the defendant’s breach.
Help from a business attorney in Tennessee
The Law Office of George R. Fusner is a firm that can help people in the Nashville area with various business law matters. Anyone who needs legal assistance running their business can contact the firm to learn more about representation.
Firm contact info:
7104 Peach Court, Brentwood TN 37027