Failure of consideration occurs when the reason for a contract no longer exists or becomes worthless. This situation can arise when one party does not fulfill their obligations, making the agreement unenforceable. Essentially, it means that the value or benefit that one party expected to receive has disappeared or is no longer valid.
This term is commonly used in contract law, which falls under civil law. It is relevant in situations where one party claims that they did not receive the promised benefit from a contract. Users can manage certain aspects of these claims through legal forms, such as breach of contract templates, available from US Legal Forms.
Here are a couple of examples of abatement:
Example 1: A homeowner hires a contractor to renovate their kitchen. The contractor accepts the payment but fails to start the work. The homeowner can claim failure of consideration because they did not receive the expected service.
Example 2: A person purchases a car that is later found to be stolen. The value of the car is nullified, leading to a failure of consideration for the buyer. (hypothetical example)
| State | Consideration Rules |
|---|---|
| California | Consideration must be lawful and not against public policy. |
| New York | Consideration can be a promise, act, or forbearance. |
| Texas | Consideration must be present for a contract to be enforceable. |
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
| Term | Definition | Difference |
|---|---|---|
| Breach of Contract | Failure to perform any term of a contract. | Failure of consideration specifically addresses the value of what was promised. |
| Void Contract | A contract that is not legally enforceable. | Failure of consideration can make a contract voidable, but not necessarily void. |
If you believe you are facing a failure of consideration, first gather all relevant documentation related to the contract. Consider reaching out to the other party to discuss the issue. If the matter remains unresolved, you may want to consult a legal professional for guidance. Additionally, you can explore US Legal Forms for templates that can help you draft a formal complaint or notice.
Browse our library of 85,000+ state-specific legal templates.
An example is when a service provider accepts payment but fails to deliver the service.