JD Next Practice Exam

Which of the following is true about legal rights in consideration?

1. They must always be related to monetary exchanges

2. Waiving a legal right can serve as consideration

3. Legal rights cannot be waived

4. Only non-legal rights can be considered

The correct answer is: Waiving a legal right can serve as consideration

Waiving a legal right can indeed serve as consideration in a contractual agreement. Consideration is a fundamental principle in contract law, referring to something of value that is exchanged between parties. When a party waives a legal right, they are providing something of value, which can be recognized as valid consideration. This waiver demonstrates a mutual agreement to alter the legal relationship, as one party gives up a right in exchange for a benefit provided by the other. For instance, if a person has the legal right to sue for a breach of contract but chooses to settle the dispute instead, the waiver of that right and the agreement to settle form a contractual consideration, as both parties assent to a new arrangement. This concept reinforces the idea that consideration does not always have to be monetary; rather, it can involve the relinquishment of legal rights or the provision of other legal benefits.