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Up To Date Business By Various Characters: 4666

Updated: 2017-12-06 00:03

Having explained who can make contracts, we are now ready to take another step. Besides having parties, there must be a consideration for every contract. This is rather a long word, but no shorter can be found to put in its place. What do we mean by this term? We mean that there must be some actual gain or loss to one or both parties to a contract, otherwise it is not valid. If, for example, A should say to B, "I will give you $100 to-morrow," B, perhaps, might go away very happy, thinking that with this money he could buy a bicycle or some other fine thing; indeed, it was just the sum for which he was longing; so on the morrow he goes to A for his money. He promptly appears, but A says to him: "I have changed my mind, and will not give you the $100." B asks: "Did you not promise to give me this money?" "Certainly." "Well, why will you not fulfil your promise?" A replies: "I was a fool when I made that promise; you are not going to give me anything for it, so I am unwilling to give the money to you." Suppose B in his sorrow should go to a lawyer, thinking, perhaps, that he could compel A by some legal proceeding to pay over the money. What would the lawyer tell him? Why, he would say: "Did you promise to give A anything for the $100?" "No, sir." "Then the law will not help you out. You cannot get the money from him by any legal method. Perhaps you can get $100 worth of fun in licking him for not giving you the money, but you cannot get the cash. But, mind, perhaps you had better not try to get your fun in that way, for this is contrary to law, and he might get much more than $100 out of you in the way of damages for licking him."

In every case, therefore, there must be something for something. Now this something may be a thousand things. It may be money or merchandise or work. In short, there is no end of the things that may serve as a consideration of a contract. An example may be given to explain what is meant by this. A man had been speculating in stocks, and one of the rules of the stock board is that a margin or sum of money that is to be paid for stock must be paid in every case. It may be that an additional margin or sum must be paid under some circumstances. The speculator in this particular case was unwilling to pay this margin, and he said to the broker: "If you will do as I wish

, and not put up this margin, I will save you from any loss that may result from such conduct." It was contrary to the rules of that stock exchange for the broker not to put up the margin, and the consequence was that he was put off the floor; in other words, the board would not permit him to act as a member. Of course, as he could not buy and sell any more stock, he lost money; and he went to his customer, the speculator, and told him that he was losing money in consequence of carrying out his order about the margin. The speculator said he was sorry, but he could not help it. The broker then insisted that the speculator must make good his daily loss in consequence of doing as he had promised. This the speculator would not do. The broker then sued him for the amount of his loss. The speculator defended on the ground that there was no consideration for the agreement he had made with the broker about the margin. The court said that the loss which the broker had suffered in consequence of carrying out his contract with the speculator was a good consideration for the contract and must be made good.

When a contract is sealed the law implies that there is consideration, and there need not be an actual one consisting of money, labour, or any other thing. This seems like an exception to the rule requiring a consideration in all cases, but the reason is this: When a sealed contract is made, the law supposes or assumes that each party made it, clearly knowing its nature-made it carefully, slowly, and, consequently, that either a consideration had been or would be given. If, therefore, one of the parties should refuse to fulfil it the other could sue him in a court of law. The person who sought to have it carried out would not be obliged to show that he had given any consideration on his part for the undertaking, because the seal appended to his name would imply that a consideration had been given. A deed for a piece of land is a good illustration of a sealed instrument. The law assumes whenever such a deed is given that the seller received a consideration for his land. The money paid was a consideration received by the seller, and the land was the consideration received by the buyer. Each gives a consideration of some kind for the consideration received from the other; and this is true in all cases.

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