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Consideration

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Consideration is a concept in contract law. Unless a contract is given under seal, each party to the contract must be entitled to consideration under the contract or else it is unenforceable. Consideration is anything that can be considered to have monetary value. Cash is always treated as consideration.

Insufficient consideration is not a sufficient reason for not enforcing a contract. However, a party must have clearly agreed to accept the consideration in order for the contract to be enforceable. This will often be an issue if there is no evidence that the parties bargained or considered the value of their own property prior to executing the contract.

If the consideration offered is so inadequate that no reasonable person would have accepted it in the circumstances, the doctrine of unconscionability applies and the contract is unenforceable. This is often the case where the two parties entering into the contract are of clearly unequal bargaining power.

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