Legal English Challenge 2024 – Day 2

Read the short text about consideration and set-off clauses, then select the correct option from the list to complete (1) ….. to (10) ….. .

Consideration is a key element in the formation of contracts, representing what each party gives or agrees to give in ___1___ for the other party’s promise or performance. Consideration can be an act, forbearance, a promise, or the ___2___ of money, goods, or services. The most typical form of consideration is ___3___ for the goods or services furnished, thus this clause provides relevant stipulations about when payments are to be made; the ___4___ of calculation; retention of title; whether VAT is included; by what method payment is to be made; whether ___5___ is to be added; the currency of payment; any deductions; whether time is of the essence; what statements or ___6___ are required, and so forth.

 While consideration is crucial for the validity of most contracts (except donation agreements), set-off is an ___7___ mechanism for adjusting financial obligations between parties involved in multiple transactions.

 Set-off provisions are usually contained in payments clauses. The expresssion ‘set-off’ generally means ‘deduction’.  Supposing that party A to the contract is ___8___ to pay party B a sum of money, but party B also ___9___ party A a smaller sum. In such a situation, it may be agreed that party A will ___10___ from the sum to be paid to party B the amount that party B owes to party A. Therefore, the debtor (Party A) is allowed to reduce or offset the amount owed to a creditor (Party B) by the amount the creditor owes to the debtor. 

Now, press the START button to select the correct option from the list to complete (1) ….. to (10) ….. .