18:49
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LSDefine
Simple English definitions for legal terms
bargain theory of consideration
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A quick definition of bargain theory of consideration:
The bargain theory of consideration is the idea that when two people make a promise to each other, and each promise is made in exchange for the other, then both promises are considered to be valuable. This is what makes a contract legally binding. It's like trading toys with a friend - if you promise to give them your toy in exchange for theirs, then both toys are considered to be valuable and the trade is fair.
A more thorough explanation:
The bargain theory of consideration is a legal concept that states that a promise or performance that is exchanged for another promise is considered as consideration for that promise. This theory is the basis for all bilateral contracts.
For example, if John promises to pay $500 to Mary in exchange for her promise to deliver a painting, then the promise of John to pay $500 is the consideration for Mary's promise to deliver the painting.
This theory is important because it helps to determine whether a contract is legally binding or not. If there is no consideration, then the contract is not valid.