An agreement not supported by consideration is called as a “nudum pactum” in legal terms. In simpler terms, it means a contract that is not legally binding because it lacks consideration.
Consideration is a fundamental element of a contract, and it refers to the exchange of something valuable between the parties involved. It can be a promise to do something, a payment, or anything that holds value. In essence, it is the “price” that the parties pay for the agreement.
A contract without consideration is often considered to be a gift, as there is no transfer of valuable consideration from one party to another. It is, therefore, not enforceable by law, and neither party can demand the fulfillment of the agreement.
For instance, let`s say that John promises to give his car to Mary without receiving anything in return. Although John has made a promise, there is no consideration involved, and therefore, the promise is not legally binding. If John changes his mind and decides to keep his car, Mary cannot sue him to enforce the agreement.
Furthermore, it is important to note that past consideration, or something that has already been done, does not count as valid consideration. For instance, if John promises to give Mary his car because she helped him repair his roof, the agreement lacks consideration because Mary`s assistance was already given before the promise was made.
In conclusion, an agreement not supported by consideration is called a “nudum pactum,” and it is not legally binding. Consideration is a vital element of a contract, and without it, there can be no valid agreement between the parties. Therefore, it is essential to ensure that all contracts have consideration before they are signed to avoid any legal disputes in the future.
