Consideration


Definition

The term “consideration” refers to something of value that a promisor receives from the promisee to form a contract.  Under the law, a contract without consideration is unenforceable.  However, there is a narrow exception of promissory estoppel where a contract not supported by consideration may nonetheless be enforced to avoid injustice.

Reference Desk

Thomas E. Holland, The Elements of Jurisprudence 286 (13th ed. 1924).

“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.”

John Salmond, Jurisprudence 359 (Glanville L. Williams ed., 10th ed. 1947).

“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 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.”

Encyclopedia Britannica, 11th Edition.

“CONSIDERATION (from Lat. considerare, to look at closely, examine, generally taken to be from con-, and the base seen in sidus, sideris, a star, the word being supposed to be originally an astrological or astronomical term), observation, attention, regard or taking into account, hence the fact taken into account, and especially something given as an equivalent or reward or in payment; in the law of contract, an act or forbearance, or the promise thereof, offered by one party to an agreement, and accepted by the other as an inducement to that other’s act or promise (Pollock on Contract). Consideration in the legal sense is essential to the validity of every contract unless it is made in writing under seal. The meaning of the word is quite accurately expressed by a phrase used in one of the earliest cases on the subject – it is strictly a quid pro quo. Something, whether it be in the nature of an act or a forbearance, must move from one of the parties in order to support a promise made by the other. A mere promise by A to give something to B cannot be enforced unless there is some consideration “moving from B.” While every contract requires a consideration, it is held that the court will not inquire into the adequacy thereof, but it must be of some value in the eye of the law. It must also be legal, and it must be either present or future, not past. See further Contract.”

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