Consideration clause - a part of the agreement devoted to mutual obligations of the parties. It is on this basis that any subsequent claims, if any, are asserted. It is an essential element and an integral part of binding agreements. It is characterized by the fact that it determines the rules, form and procedure for the fulfillment by the parties of the terms and conditions accepted by them.
Nature of the obligation
The obligation is the cause of the receivable and the debt. One party promises to the other party that it will comply with its request within a specified period of time or upon request. In turn the other party undertakes that in the situation of a correct fulfillment of the benefit, it will accept such benefits. However, for it to be effective, both parties must make a valid and identical declaration of intent.
However, the laws of the States concerned may restrict the catalogues of objects which may be subject to the obligation. These include things such as trafficking in human beings, exploitative labor, narcotic drugs and weapons of illegal origin. The conclusion of such contracts is not only void by operation of law, but may also be subject to public prosecution, which may lead to the conviction of the parties to the contract. It is a type of benefit in which each party is both a creditor and a debtor. The type of such an obligation obliges both the obligation and the entitlement. The basic principle of mutual benefit provision is their simultaneous provision. This means that the commitment will only be implemented if both parties comply with the agreed provisions. Mutual benefits are the basis for economic trade and represent an elementary principle for something. It is assumed that the benefits described are equivalent to each other as both parties have agreed to provide them.
Subject of the consideration clause
The subject of the obligation may be: tangible objects, intangible objects, real estate or services. Each of them has its own unique features. However, it is common for them to be available for use in the course of trade. The Considaration Clause is an essentialia negotii of contracts, which means that any binding contract will remain null and void without being clearly defined. Therefore, it is important to indicate when defining them:
- Subject matter of the commitment
- Subject of the obligation
- Method of fulfillment of the obligation
- Time limit for fulfillment of the obligation; and
- Place of performance of the obligation.
After completing the above mentioned sections, all the minimum requirements for a consideration clause will be met.
The content of the consideration clause shall be in accordance with the principles of morality and social conduct. The conclusion of any unauthorized clauses may result in the contract being automatically voided in whole or in part. In business-to-business trade, the catalogue of prohibited terms is by far small and boils down to terms that were misleading, apparent or threatened. Special protection is provided for consumers. As they are generally in a weaker legal position, most legislations grant them special protection. Hence, all provisions aiming, among others at: exclude or limit liability towards a consumer for personal injury; entitle the consumer's contractual partner to unilaterally modify the contract without a valid reason as indicated in that contract; only confer on the consumer's contractual partner an entitlement to ascertain the conformity of the performance with the contract. Such arrangements are referred to as tort clauses, which may give rise to a right of withdrawal and a possible claim for damages.
- T. Huber-Putschert 2018, p. 6-8
- E. Mackaay 2011, p. 8-12
- P. S. Abril, F. O. Blazquez, J. M. Evora 2018, p.17
- Abril P. S., Blazquez F. O., Evora J. M. (2018), The Right of Withdrawal in Consumer Contracts: a comparative analysis of American and European Law, Barcelona, p. 17
- Huber-Putschert T.(2018), Law of obligations, Zurich Open Repository and Archive, Zurich, p. 6-8
- Mackaay E.(2011), The Civil Law Of Contract. Contract Law and Economics., Montreal, p. 8-12
Author: Maria Bartkowska