Question

1. What is the definition of consideration?

2. Is there a difference between promising to give a person a gift and promising to make a gift to a charity? Assume that both the individual and the charity were already planning to buy something and they both decide they will use your gift to make the purchase

Answer 1

Consideration in most case is monetary, but it can be a promise to perform a special act, or a promise to prevent from doing something.In common it is simply giving careful thought to proper conduct.

The elements that are essential to the making of a valid gift are intent, delivery and acceptance by the receiver.The delivery is complete when it is directly made to the receiver.Gifting a person is a voluntary transfer without any particular cause and without consideration.A gift is generally made of respect, charity, affection and not from any duty.It is made out of economic benefits. however the difference here while making a gift to charity, it can provide a tax receipt for the gift amount.A gift is made on the will of a donor. A gift given to a person can be enjoyed by the person or transferred to other party whom he wishes. A gift promised to give to a charity has to be used by the charity itself if there is a document agreed upon between the donor and the charity.A donor can make a gift a registered charity.A gift includes stocks, bonds, real estate and personal items. Services doesn't constitute gifts.A donor can gift directly to the person whom he intends but in case of gifting to a charity the donor can intend to gift it through the third party on certain terms and conditions.The donor can alone take a decision in gifting to a person where as to gift a charity and if the donor is an organization, then it is the managing team which acts as a donor to the charity.

Here Consideration plays the role on the part of the person being gifted to purchase anything out of the gift and also the charity being gifted decides to use it to make the purchase.The person when gifted by the donor is free to decide on his own to buy something from the gift received but the charity along with its managing team has to decide and buy what it intends from the gift.However records are maintained by the charity on the gifts being received.Also there should be unconditional acceptance from person receiving the gift and the charity receiving the gift.However there is a legal obligation on the donor who gives the gift where certain taxable amount would be involved in this process.

Thus it is the consideration that matters which enables each party to act on the gift received either the person who receives it or the charity which receives it.