Consideration: Executed and Executory Consideration

Shreya

Abstract

Consideration is a key term in contract law that describes the exchange of anything of value between the parties to a contract. It is an essential component that separates a legally-binding agreement from a simple promise. Executed consideration and executory consideration are the two categories under which consideration may be divided. At the moment of contract creation, executed consideration is defined as consideration that has been completely fulfilled or executed. In other words, before the contract is created, the act or promise that constitutes the consideration has already been fulfilled. In situations where products or services have been supplied in return for money, executed consideration is often encountered. Contrarily, executory consideration is defined as consideration that is anticipated to be carried out in the future. It entails a promise or deed that has not yet been carried out or put into action when the contract was formed. In this instance, both parties are required to keep their pledges and to carry out their respective obligations under the contract when the time comes. In contract law, the difference between executed and executory consideration is crucial since it has an impact on the contract's capacity to be enforced and its potential legal ramifications. Contracts containing executed consideration are deemed legally binding and enforceable since the performance of the consideration has already occurred.