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Simple English definitions for legal terms
failure of consideration
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A quick definition of failure of consideration:
Term: Failure of consideration
Definition: Failure of consideration is when someone promises to give something of value in exchange for something else, but then fails to follow through with their promise. This can happen if the thing promised becomes worthless or much less valuable than originally thought, or if the person promising to give it doesn't actually give it. When this happens, the contract may no longer be enforceable, meaning that the people involved can't make each other do what they promised. It's different from a lack of consideration, which means that the contract was never valid in the first place because there was no exchange of value.
A more thorough explanation:
Definition: Failure of consideration is a legal term used in contract law. It means that the consideration, which is something of value that one party gives to another in exchange for something else, has become worthless or insignificant compared to the value of the contract. This can happen if the consideration offered becomes worthless or if the party promising to furnish the consideration fails to do so.
For example, if you agree to pay someone $100 to mow your lawn, but they never show up to do the job, then there is a failure of consideration. The consideration promised (the lawn mowing) was not provided, so the contract is unenforceable.
Another example is if you agree to buy a car for $10,000, but when you go to pick it up, you find out that it has been severely damaged and is now worth only $1,000. In this case, there is a failure of consideration because the value of the consideration (the car) has significantly decreased.
It is important to note that failure of consideration is different from lack of consideration. Lack of consideration means that there was never a valid contract to begin with because one party did not provide anything of value. Failure of consideration, on the other hand, means that a valid contract with valid consideration has become unenforceable due to the consideration no longer being valuable.
For example, if you agree to pay someone $100 to mow your lawn, but they never show up to do the job, there is a failure of consideration. However, if you agree to pay someone $100 to be your friend, there is a lack of consideration because friendship is not something that can be bought or sold.
In legal cases such as In re Condado Plaza Acquisition LLC, 620 B.R. 820 and Davis v. Am. Int'l Bridge, Inc., 910 N.W.2d 621, failure of consideration was used as a basis for rescinding or rendering a contract unenforceable. These cases illustrate how failure of consideration can affect the validity and enforceability of a contract.