Consideration issues in construction contracts

Kansas residents may be familiar with the legal principle of consideration. In contract law, consideration usually involves money being exchanged for goods or services. For example, an agreement for one party to pay the other for house painting services would likely be an enforceable contract because of the promise to pay. While money does not need to change hands in order for a contract to be enforceable, there does have to be some form of consideration.

If an individual agrees to perform a service or provide an item with no expectation of receiving anything in return, the law considers the arrangement to be a gratuitous promise. This means that the individual will face no civil sanctions if they fail to honor the agreement. While establishing consideration is often relatively straightforward, it can be challenging with construction contracts.

As an example, a general contractor will typically receive a bid regarding the cost of goods and services provided by subcontractors before a bid for a project might be accepted. If the subcontractor wins the bid but later increases the price, the general contractor’s agreement to pay the new price may not be enforceable because there was no consideration.

Determining whether certain agreements are enforceable can be difficult because a number of different circumstances might affect the terms of a contract. Individuals who enter into construction contracts regularly might benefit from retaining the services of an attorney who might be able to help the client determine whether each agreement is enforceable. That attorney may also help a client pursue compensation if an enforceable contract has been breached.

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