Rescinding an executory bilateral contract does not qualify as consideration. True or False
Answer (2)
The statement is FALSE; rescinding an executory bilateral contract does not qualify as consideration. Rescission does not involve an exchange of value, which is necessary for valid consideration in contract law. Consequently, rescinding leaves the parties without new considerations being exchanged.
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In the context of contract law, the question pertains to whether rescinding an executory bilateral contract can be considered 'consideration.' Let's break this down:
Executory Bilateral Contract : This type of contract is one where both parties have ongoing obligations that are yet to be fulfilled. For example, a contract in which one party agrees to buy goods and the other agrees to supply them, with delivery and payment set for the future.
Consideration : In contract law, consideration is the value exchanged between the parties to a contract, which can be in the form of money, goods, services, or a promise to act or refrain from acting. It's a critical element that makes a contract enforceable.
Rescission : This is the process of canceling or terminating a contract, returning both parties to their pre-contractual position.
Answer : Rescinding an executory bilateral contract does not qualify as consideration.
Explanation :
Consideration is typically about the obligations and performances that are to be exchanged between the parties as they enter into a contract, not about terminating it.
When a contract is rescinded, it nullifies the original obligation, putting parties in a position as if the contract never existed rather than providing 'consideration', which implies a new or continuing obligation or benefit.
Therefore, the statement 'Rescinding an executory bilateral contract does not qualify as consideration' is True .
