TermiKnowledge - Supply Chain, Procurement and Inventory Terminologies
Past consideration is not part of the contractual language in most contracts. For a contract to be legal, consideration must be had at the time that the contract was created. Past consideration can not be contained in a contract mainly because it didn't benefit either the promiser or present. In many cases, past consideration is interpreted to mean that the existing conditions of production and supply are not going to change before the contract is signed.
In contracts from other languages, such as the United States contract law, there is no way to enforce previous contracts unless the contract parties agree that there was past consideration of their agreements. So one party decides that they want to stay in business and another party wants out of the business, then the contract must contain a clause allowing for negotiations. This negates the entire point of the contract. The original contract parties may well agree to continue what they're doing under certain conditions, but if they don't, then the original agreement is voided.
In most contracts written in English law, there are no provisions allowing for consideration of previous contracts during new contracts. If the original contract contained such a provision, then the new contract must include such a provision, otherwise it will not be enforceable. However, in some contracts, where a new contract is added to an existing contract, then such a provision may be allowed. It is up to the contracting parties to determine if such a provision is allowed in the new contract. Even so, it's wise to read the contract carefully and make sure that it contains no such provision.
