Question

Braxton questions whether there is consideration for his contract with Tawny to exchange his accounting services for her payment of a certain amount. To constitute consideration, there must be?

1) An offer and acceptance
2) A legal detriment to both parties
3) A mutual exchange of promises
4) A written agreement

Answer 1

Consideration in a contract involves a legal detriment to both parties, where each party must give up a legal right or undertake an obligation that they are not already bound to perform.

Step-by-step explanation:

To constitute consideration in a contract, there must be something of value exchanged between the parties. Specifically, consideration requires either a legal detriment to the promisee or a benefit to the promisor. In this context, a legal detriment means that the promisee must give up something they are legally entitled to, or take on an obligation they are not already bound to perform. The correct answer to Braxton's question is therefore a legal detriment to both parties. This implies that both parties in the contract must incur some sort of obligation or give up a legal right. An exchange of promises can be a form of consideration if these promises involve legal detriments or benefits, so item 3 is somewhat related but not specifically the requirement for consideration.