Examkin

Question

Difficulty: EasyLaw of Contract: Definition, Essential Elements, and Types

In commercial law, a contract under seal (specialty contract) requires valuable consideration to be legally binding on the parties involved.

Answer: Answer

Answer

The statement is False. A contract under seal (specialty contract) is legally binding due to its formal execution by deed, even in the absence of valuable consideration.
The statement is false because a specialty contract (or contract under seal) derives its binding legal force from the solemnity of its form and execution, making valuable consideration unnecessary for its validity.

Step-by-Step Solution

1
Identify the specific type of contract mentioned in the statement.
The statement refers to a specialty contract (contract under seal).
Different types of contracts (simple contracts vs. contracts under seal) have distinct legal requirements for validity.
2
Examine the role of consideration in specialty contracts.
Contracts under seal do not require valuable consideration because their validity stems from their formal execution under deed.
General simple contracts require offer, acceptance, and consideration, whereas formal specialty contracts are an exception to the requirement of consideration.
3
Evaluate the accuracy of the statement.
The statement asserts that consideration is required for a specialty contract, which is legally inaccurate.
Since consideration is not necessary for specialty contracts, the statement is false.

Key Concept

Distinction between simple contracts and specialty contracts regarding the requirement of consideration
Rate this question

Topics

Law of Contract: Definition, Essential Elements, and Types

More questions from this topic