Consideration in a Construction Contract
What Is Consideration?
Consideration is an important element of construction contracts. It is the benefit that each party involved in the contract gets or expects to get from the deal. Consideration is usually comprised of the two parties promising to do something that they are not legally obligated to do or a promise not to do something you have the right to do (i.e. file a lawsuit). This needs to be done in order for consideration to provide a valid basis for a contract. This can sometimes be referred to as a “bargained-for-detriment.” In other words, both parties entering the contract must exchange one thing of value for another. When drawing up a contract, having your Tampa contractor lawyer present to clarify proposed considerations is heavily recommended. Your lawyer will have the experience to know what to look for in an ideal consideration.
What Happens When Consideration Is Absent From A Contract?
In the case that a court declares that a contract is unenforceable, it can be because it lacks consideration. A lack of consideration means that one of the parties in a contractual agreement is not obligated, in any way, while the other party is obligated. Typically, the courts will not interfere with parties dealing with consideration issues. However, there are a few instances when a judge will declare a contract unenforceable because the consideration was lacking:
- When a consideration is treated more like a gift
- When one of the parties is already legally bound to perform
- When consideration is based on a promise that is illusional
- When consideration is made as a result of a past event
Tampa contractor lawyers can help to go over with you what entails a “faulty consideration” and how to avoid contracts that lack consideration.
To schedule a consultation with one of our experienced construction lawyers, please call us today.