what is executory consideration?
when a promise is paid for a future obligation.
Executory consideration refers to a type of consideration that has been promised but has not yet been performed or fully executed. In contract law, consideration refers to the exchange of something of value between parties in order to create a binding agreement. Usually, one party promises to perform some action or provide a service or goods in exchange for another party’s promise to pay or perform some other action. In an executory consideration, one or both parties have made a promise to do something in exchange for the other party’s promise but have not yet fully performed their obligations.
For example, if a seller promises to deliver a product to a buyer in exchange for the buyer’s promise to pay, this is an executory consideration. The seller has not yet delivered the product, and the buyer has not yet paid for it. Both parties have made promises that have not yet been fully executed.
Executory consideration is important because it helps to establish the existence of a contract and the obligations of the parties involved in the agreement. If one party fails to fulfill their promise, the other party may have legal recourse to enforce the terms of the contract.
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