JD Next Practice Exam

In contract law, what does adequate consideration entail?

1. Valuable exchange between parties

2. Consent from at least one party

3. Submission of the agreement in writing

4. Involvement of at least two parties

The correct answer is: Valuable exchange between parties

Adequate consideration in contract law involves a valuable exchange between the parties entering into the agreement. This principle asserts that each party must provide something of value, which can be a promise, a payment, or an act, as part of the contract. The value exchanged does not need to be equal or fair, but it must be sufficient to support the contractual obligation. This ensures that both parties are committed to the agreement and provides a legal basis for enforcing the contract. Other options do not accurately capture the essence of adequate consideration. While consent from at least one party is crucial for any agreement, adequate consideration requires mutual value exchange. Similarly, submitting the agreement in writing is important for certain contracts but is not a requirement for adequate consideration itself. Lastly, while contracts typically involve at least two parties, the core of adequate consideration is the valuable exchange, not the number of parties involved.