As a business professional, it is important to understand legal terms and concepts, such as “valuable consideration.” Put simply, valuable consideration is something of value exchanged in return for a promise or for the performance of an act. This could be an exchange of goods or services, a promise of money or other form of compensation, or an exchange of one kind of benefit for another, such as a reduction in indebtedness in exchange for services provided.
The concept of valuable consideration is especially important to business professionals because it underpins many of the contractual relationships and agreements that are essential to the continued success and sustainability of all organisations. For instance, when employees provide their services in exchange for wages, the wages would be considered the valuable consideration for their services. Similarly, when an individual borrows money from a lender and agrees to pay interest in exchange, the interest is held to be the valuable consideration for the use of the money.
Many contracts must be accompanied by valuable consideration in order to be enforceable by law. This means that both parties must not only have agreed to a certain set of terms and conditions but must also have exchanged something of value in return. If a contract is not supported by valuable consideration then it might not be able to be enforced by the courts.
It is important for business professionals to understand this concept because it will help them to identify which legal contracts are enforceable and the aspects of a contract that need to be in place for it to be legally binding. By understanding this concept, business professionals can ensure that they are creating the robust legal agreements that will continue to support their business objectives.