Consideration in an Agreement
One of the other important elements of contract law, is the requirement of consideration. A definition of "consideration" which is:
".. some right, interest, profit or benefit accruing to the one party or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other."
Under contract law, there is no contract if there is no consideration.
As such, a contract differs from a gift. This also explains why you sometimes hear of very expensive objects sold for $1; this is done to ensure that what is essentially a gift comes to the recipient with the legal protection of contract law.
Under contract law, there is no contract if there is no consideration.
Consideration does not necessarily have to be quantified or quantifiable in monetary terms. Any discernible detriment to one of the parties could be that party's consideration.
There is one exception to the requirement of "consideration" and that is a "deed", which is a contract "under seal" or a "specialty contract". In centuries past, persons contracting would drip a drop of hot wax on the bottom of the contract and press a family ring into the wax, thereby signifying consent to the terms of the document. Nowadays, deeds are used mostly in contracts that involve real estate. If a contract is a "deed", then no consideration is required. If charitable donations are made under seal, they are valid contracts even though there is no valid consideration.
Above, it is said that only a party to a contract can sue under it's terms, except for where agents have been employed, this later state of affairs allowing the principal to assume legal rights under the contract. Not so with contracts under seal. Only signatories to a contract under seal can seek to enforce it even if these signatories were agents.
Considering the confused state of common law's contract law component, and the extent of contemporary commercial transactions, the special status of contracts under seal is now so far outdated that it verges on ludicrous. Judges have squirmed when faced with arguments based on "deeds" or "under seal" and have since added that the absence of a seal is not fatal as long as the intention to seal was clear!
In the meantime, any seal will do. Many contracts do have red seals, dots or "made under seal" text boxes next to the signature block to show that the contract is under seal.
