Question

Explain the concept of consideration.
Describe the rules regarding consideration.
Explain how the UCC rules regarding consideration are different from the common law rules regarding consideration.
Explain the legal effect of a lack of capacity on a person’s ability to enter into a contract.
Describe the circumstances under which a party would have limited capacity to enter into a contract.
Explain the legal effect of entering into a contract for an illegal purpose.
Action Items
Research the differences between United States and Saudi Arabian contracts with regard to consideration, capacity and illegal purposes.

Respond to at least one of your classmates' postings.

Also, there is answer for a student that requires a response:
Contract administration guidelines for public infrastructure projects in the United States and Saudi Arabia:
International construction, where contractors perform works in foreign countries, poses cultural and contractual risks resulting from the dissimilarities in social and legal outlooks. One of the major risks that leads to disputes in such international projects is poor contract administration. Research has been focused toward the cultural risks and ex-post dispute resolution in international construction, missing the important ex-ante dispute avoidance aspect. This paper addresses this knowledge gap with a special focus on the Kingdom of Saudi Arabia (KSA), which is the largest economy in the Middle East and North Africa. The paper does so by providing in-depth—yet practical—contract administration guidelines for U.S.

Answer 1

Concept of Consideration

Consideration is an essential element in a contract.Consideration commonly refers to something in return.This return may take the form of money or in kind.Consideration is given for the perfomance done adhering to the contract or in exchange  for the services done.In the case of insurance contract the consideration is called premium.The consideration to become valid it should be given at the will of the promissor and can be past,present or future and must be real and have posses value.

Rules regarding consideration

There are certain rules to be complied in consideration .They are:

• Consideration must move at the desire of promissor: if it is done without the request of the promissor it will not be valid
• Consideration may move from the promisee or any other person.it can be paid by the promisee or a third party on his behalf
• Consideration may be past,present or future
• Consideration need not be adequate.:it means that it is not necessary that it must be full return.
• Consideration must be real and not illusory: It means that it hould have some value in the eyes of law.
• Consideration must not be something which the promisor is already bound to do: it means that responsibilities already specified in contract as part of his obligation couldn't be a valid consideration .
• Consideration must be lawful: The consideration given must be abided by law.

Difference between UCC rules and Common law regarding consideration

There are mainly two differences in UCC and Common law regarding consideration.They are

1. In the case of contract modification,common law requires consideration while in UCC it is not a prerequisite.
2. In the case of a promise to keep the deal open in an option contract ,the common law requires consideration while UCC call this a firm offer and need it in writing.

Legal effect of a lack of capacity on a person's ability in entering into a contract.

To lack the capacity to enter into a contract means that the person is unaware of what they are doing.These person may be a minor or may be mentally ill.Contract entered into by such person is hence voidable .It means that this contract will not have valid existence .It is voidable by the person .This protect this person from being forced to a deal that takes advantage of them.

Circumstances under which a party would have limited capacity to enter into contract

A party would have limited capacity to enter into a contract when

• he is a minor - is under the age of 18
• he has mental illness
• he has been declared incompetent by the court- this may include alien enemy,convicts,insolvents,foreign ambassadors etc,,

Difference between United States contract and Saudi Arabian contract with regards to consideration

In the case of United States,consideration is something of value by a promissor to promisee and past consideration is not a valid considaration.

In the case of Saudi Arabia ,consideration it is not necessary to give consideration.