CONSIDERATION

consideration,n.1. Something (such as an act, a forbearance, or a return promise) bargained for and received by a promisor from a promisee; that which motivates a person to do something, esp. to engage in a legal act. • Consideration, or a substitute such as promissory estoppel, is necessary for an agreement to be enforceable. See Restatement (Second) of Contracts § 81 (1979). [Cases: Contracts  49. C.J.S. Contracts § 87.] “A ‘consideration’ has been explained to be ‘any act of the plaintiff from which the defendant, or a stranger, derives a benefit or advantage, or any labour, detriment, or inconvenience sustained by the plaintiff, however small the detriment or inconvenience may be, if such act is performed, or inconvenience suffered by the plaintiff with the assent, express or implied, of the defendant, or, in the language of pleading, at the special instance and request of the defendant.’ ” Thomas E. Holland, The Elements of Jurisprudence 286 (13th ed. 1924).

“A consideration in its widest sense is the reason, motive, or inducement, by which a man is moved to bind himself by an agreement. It is not for nothing that he consents to impose an obligation upon himself, or to abandon or transfer a right. It is in consideration of such and such a fact that he agrees to bear new burdens or to forgo the benefits which the law already allows him.” John Salmond, Jurisprudence 359 (Glanville L. Williams ed., 10th ed. 1947).

“The word ‘consideration’ has been around for a long time, so it is tempting to think we have had a theory of consideration for a long time. In fact until the nineteenth century the word never acquired any particular meaning or stood for any theory.” Grant Gilmore, The Death of Contract 18 (1974).

“In the late fifteenth and early sixteenth centuries the word ‘consideration’ was very familiar to lawyers, and although it had not yet acquired a special legal meaning (and indeed was not to do so during the period under discussion) it had already begun to develop legal associations. Most commonly it was used in statutes…. In the statutes of Henry VI it became quite common for the draftsman, after he had rehearsed the circumstances to introduce the enacting part with a clause in the following (or similar) form: ‘The King, considering the premisses, of the Assent and Request aforesaid, hath ordained and established ….’ In the course of time the matters which were considered, and to which consideration was given, came themselves to be called ‘the considerations.’ [By the late 15th century] the considerations were the matters considered; they were the factors which Parliament or the King was supposed to have had in mind in legislating, and which moved or motivated the enactment. Loosely the word could be treated as synonymous with ‘cause,’ and both in statutes and elsewhere causes and considerations were often mentioned in the same breath. But ‘cause’ does not mean exactly the same thing as ‘consideration’; it lacks the suggestion of what was in the mind, what was considered, what motivated.” A.W.B. Simpson, Legal Theory and Legal History 332 (1987).

adequate consideration.Consideration that is fair and reasonable under the circumstances of the agreement. Cf. sufficient consideration. [Cases: Contracts  53–54. C.J.S. Contracts §§ 87, 131–132.]

“It is helpful to observe precision in use of vocabulary when analyzing consideration issues. Distinguish carefully between ‘adequate’ consideration and ‘sufficient’ consideration. ‘Adequacy’ refers to whether there was a fair bargain involving an exchange of equal values. ‘Sufficiency’ refers to whether the consideration is legally suffi-cient to enforce a promise, and this requires only that there be some legal detriment incurred as a bargained exchange for the other party’s promise.” Claude Rohwer & Gordon D. Schaber, Contracts in a Nutshell 83 (4th ed. 1997).

“Although courts have not lost the habit of speaking of an ‘adequate,’ a ‘sufficient,’ or a ‘valuable’ consideration, the bargain test as epitomized in the Restatement imposes no such additional requirement.” E. Allan Farnsworth, Contracts § 2.11, at 69–70 (3d ed. 1999).

 

and other good and valuable consideration.See other consideration. concurrent consideration.Consideration arising at the same time as other consideration, or where the promises are simultaneous. [Cases: Contracts  56. C.J.S. Contracts §§ 105–106.] continuing consideration.An act or performance extending over time. due consideration.See sufficient consideration.executed consideration.A consideration that has been wholly given; past consideration as opposed to present or future consideration. [Cases: Contracts  78. C.J.S. Contracts § 92.] executory consideration (eg-zek-y<<schwa>>-tor-ee). A consideration that is to be given only after formation of the contract; present or future consideration as opposed to past consideration. express consideration.Consideration that is specifically stated in an instrument. fair consideration. 1. Consideration that is roughly equal in value to the thing being exchanged; consideration given for property or for an obligation in either of the following circumstances: (1) when given in good faith as an exchange for the property or obligation, or (2) when the property or obligation is received in good faith to secure a present advance or prior debt in an amount not disproportionately small as compared with the value of the property or obligation obtained. — Also termed fair and valuable consideration. 2. Consideration that is honest, reasonable, and free from suspicion, but not strictly adequate or full. future consideration. 1. Consideration to be given in the future; esp., consideration that is due after the other party’s performance. 2. Consideration that is a series of performances, some of which will occur after the other party’s performance. 3. Consideration the specifics of which have not been agreed on between the parties. Cf. past consideration. good and valuable consideration.See valuable consideration.

good consideration. 1. Consideration based on natural love or affection or on moral duty <good consideration, being based purely on affection, does not amount to valuable consideration>. • Such consideration is usu. not valid for the enforcement of a contract. — Also termed meritorious consideration; moral consideration. [Cases: Contracts  76–77. C.J.S. Contracts §§ 102–103, 127, 130.]  “A good consideration is that of blood, or the natural love and affection which a person has to his children, or any of his relatives…. A good consideration is not of itself sufficient to support a promise, any more than the moral obligation which arises from a man’s passing his word; neither will the two together make a binding contract; thus a promise by a father to make a gift to his child will not be enforced against him. The consideration of natural love and affection is indeed good for so little in law, that it is not easy to see why it should be called a good consider-ation ….” Joshua Williams, Principles of the Law of Personal Property 95–96 (11th ed. 1881).

“Stated simply, good or meritorious consideration is nothing more than motive or moral obligation.” 3 Richard A. Lord, Williston on Contracts § 7:16, at 325–26 (4th ed. 1992). 2. Loosely, valuable consideration; consideration that is adequate to support the bargained-for exchange between the parties <his agreement to pay the offering price was good consideration for the sale>. [Cases: Contracts  49. C.J.S. Contracts § 87.]

gratuitous consideration (gr<<schwa>>-t[y]oo-i-t<<schwa>>s). Consideration that, not being founded on any detriment to the party who gives it, will not support a contract; a performance for which a party was already obligated.

grossly inadequate consideration.Consideration whose value is so much less than the fair value of the object acquired that it may not support finding that the transaction is a valid exchange. • Depending on the surrounding circumstances, the transaction may actually be fraud, a gift, or something else other than a sale and purchase.

illegal consideration.Consideration that is contrary to the law or public policy, or prejudicial to the public interest. • Such consideration does not support a contract. [Cases: Contracts  103.

C.J.S. Contracts §§ 195–200, 213–214.]

immoral consideration.A consideration that so offends societal norms as to be invalid. • A contract supported by immoral consideration is usu. voidable or unenforceable. — Also termed turpis causa. [Cases: Contracts  112. C.J.S. Contracts §§ 275–276.] implied consideration.Consideration that is inferred by law from the parties’ actions.

impossible consideration.Consideration stemming from a promise or performance that cannot

be fulfilled. [Cases: Contracts  80. C.J.S. Contracts § 106.]

inadequate consideration.Consideration that is not fair or reasonable under the circumstances of the agreement. Cf. adequate consideration. [Cases: Contracts  53–54. C.J.S. Contracts §§ 87,

131–132.]

invented consideration.Fictional consideration created by a court to prevent the invalidation of a contract that lacks consideration. legally sufficient consideration.See sufficient consideration. meritorious consideration.See good consideration. moral consideration.See good consideration.

nominal consideration.Consideration that is so insignificant as to bear no relationship to the value of what is being exchanged (e.g., $10 for a piece of real estate). • Such consideration can be valid, since courts do not ordinarily examine the adequacy of consideration (although they do often inquire into such issues as fraud and duress). — Also termed peppercorn. [Cases: Contracts

53–54. C.J.S. Contracts §§ 87, 131–132.]

“Offers made in consideration of one dollar paid or promised are often irrevocable …. The irrevocability of an offer may be worth much or little to the offeree, and the courts do not ordinarily inquire into the adequacy of the consideration bargained for. Hence a comparatively small payment may furnish consideration for the irrevoca-bility of an offer proposing a transaction

 

involving much larger sums. But gross disproportion between the pay-ment and the value of the option commonly indicates that the payment was not in fact bargained for but was a mere formality or pretense. In such a case there is no consideration …. Nevertheless, such a nominal consideration is regularly held sufficient to support a short-time option proposing an exchange on fair terms. The fact that the option is an appropriate preliminary step in the conclusion of a socially useful transaction provides a sufficient substantive basis for enforcement, and a signed writing taking a form appropriate to a bargain satisfies the desiderata of form. In the absence of statute, however, the bargaining form is essential: a payment of one dollar by each party to the other is so obviously not a bargaining transaction that it does not provide even the form of an exchange.” Restatement (Second) of Contracts § 87 cmt. b (1979).

other consideration.Additional things of value to be provided under the terms of a contract, usu. unspecified in the contract, deed, or bill of sale, because they are too numerous to conveniently list, or to avoid public knowledge of the total amount of consideration. — Also termed other good and valuable consideration.

past consideration.An act done or a promise given by a promisee before making a promise sought to be enforced. • Past consideration is not consideration for the new promise because it has not been given in exchange for this promise (although exceptions exist for new promises to pay debts barred by limitations or debts discharged in bankruptcy). See PREEXISTING-DUTY RULE. Cf. future consideration. [Cases: Contracts  79. C.J.S. Contracts §§ 125–126, 128–130.]

“A past consideration is, in effect, no consideration at all; that is to say, it confers no benefit on the promisor, and involves no detriment to the promisee in respect of his promise. It is some act or forbearance in time past by which a man has benefited without thereby incurring any legal liability.” William R. Anson, Principles of the Law of Contract 149 (Arthur L. Corbin ed., 3d Am. ed. 1919).

“ ‘Past Consideration.’ The quotation marks suggest that there is something wrong with this phrase. Past con-sideration, or something given, done, or suffered in the past which purportedly supports a subsequent promise, is no consideration. If a benefit has been conferred upon the promisor or if the promisee has suffered a detriment in the past and there is a subsequent promise to pay therefor, there is no bargain for such past value. Therefore, it cannot constitute consideration.” John Edward Murray Jr., Cases and Materials on Contracts 427 (2d ed. 1976). sufficient consideration.Enough consideration as a matter of law to support a contract. — Also termed due consideration; legally sufficient consideration. Cf. adequate consideration. [Cases:

Contracts  54. C.J.S. Contracts § 87.]

valuable consideration.Consideration that is valid under the law; consideration that either confers a pecuniarily measurable benefit on one party or imposes a pecuniarily measurable detriment on the other. — Also termed good and valuable consideration; legal consideration. [Cases: Contracts  49. C.J.S. Contracts § 87.]

“By a valuable consideration is meant something of value given or promised by one party in exchange for the promise of the other…. The thing thus given by way of consideration must be of

 

some value. That is to say, it must be material to the interests of one or the other or both of the parties. It must either involve some gain or benefit to the promisor by way of recompense for the burden of his promise, or it must involve some loss or disadvantage to the promisee for which the benefit of the promise is a recompense.” John Salmond, Jurisprudence 360 (Glanville L. Williams ed., 10th ed. 1947).

2.Parliamentary law. The process by which a deliberative assembly disposes of a motion; DELIBERATION. • Consideration begins with a member making a motion and the chair stating the question on the motion; it ends with the chair putting the question on the motion (or on a subsidiary motion that disposes of the first motion). It also includes debate and may also include (among other things) amendment and referral to a committee.

consideration by paragraph.See consideration seriatim.

consideration seriatim.Consideration serially, whereby a deliberative assembly considers a long or complex motion in a series of readily divisible parts before voting on the entire motion. — Also termed consideration by paragraph (in which case a “paragraph” means not a literary paragraph but any readily divisible part of a motion, which may include more than one literary paragraph); serial consideration.

“When a proposition, motion or resolution has many parts (paragraphs, sections, or clauses), or many articles (as a set of bylaws which is up for revision or amendment), it is best and most prudent that no vote be taken on each separate part. Instead, a single vote covering all its parts should be taken after each of them has been duly con-sidered, amended, and perfected. Seriatim (Lat.) literally means ‘serially,’ and when applied to several or more parts of a parliamentary proposal or question it means consideration paragraph by paragraph or part by part.

“Hence, under the doctrine of consideration by paragraph, or seriatim, each part is discussed and may be amended and perfected to suit; then, without putting it to a vote for final adoption, the next part or paragraph is similarly open to discussion and amendment, but is not voted on for final adoption yet; and, in like manner, each additional part is perfected in turn until all the parts of a proposal have been considered.” George Demeter, Demeter’s Manual of Parliamentary Law and Procedure 146 (1969).informal consideration.Consideration without limit on how often a member may speak to the same question. • Informal consideration is substantially equivalent to consideration in committee of the whole or quasi-committee of the whole, without the fiction of the assembly resolving itself into a committee. See committee of the whole under COMMITTEE. serial consideration.See consideration seriatim .3.Hist. A court’s judgment. — Also termed (in Roman law) consideratio. CONSIDERATION, FAILURE OF consideration, failure of.See FAILURE OF CONSIDERATION. [Blacks Law 8th]