Courts distinguish between mere gifts between parties and legally binding commitments by the element of consideration.

Question

Quizplus · Accepted Answer

This statement is true. Consideration refers to something of value that is given in exchange for a promise or performance. In order for a contract to be legally binding, there must be valid consideration between the parties involved. Mere gifts, on the other hand, do not involve consideration and are not considered legally binding commitments.

Courts Distinguish Between Mere Gifts Between Parties and Legally Binding