Something of value given or promised to
make an agreement legally binding. The law
will not enforce a purely gratuitous
promise. To enforce a claim regarding a
promise, the plaintiff must satisfy the
court either that the promise was contained
in a document under seal, or that it was
supported by consideration. One commonly
accepted definition of consideration is
something of value given by a promisee to a
promisor to make the promise binding.
Consideration is therefore what a person
receives or is to receive for what that
person does or agrees to do. Whatever is
given is referred to as valuable
consideration in that value can be attached
and may be:
An act in return for an act;
A promise in return for a promise;
or
An act in return for a promise.
Where a promise is made under seal, no
consideration is required since the law
presumes that the solemn act of sealing
replaces consideration. Form and conduct
indicate that the person signing the
document gave careful thought to the nature
of the transaction.
Following are selected rules relating to
consideration.
If a promise is not made under seal,
consideration is necessary to make it
binding.
Must be of some value, but need not
be equal to what is received in return.
It has been held that a peppercorn is
valuable consideration as long as the
promisor accepts it as such.
Must move from the promisee to the
promisor. However, many ask what does
the buyer (as promisee) receive as
consideration for a promise not to
revoke the offer? The answer in most
instances is nothing, but the promise is
usually made under seal.
Must be lawful.
The promisee cannot rely on past
conduct or promises as consideration. It
must be present or future consideration
to be effective.
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