Also known as: adequate consideration · consideration adequacy
Written by attorneys · grounded in primary & secondary sources — see below
A determination of whether the values exchanged in a bargain are equivalent or fair. Courts generally refrain from making this inquiry when assessing whether consideration exists to support a contract.
Alliance Holdings' board met and discussed the marketing value of Adrian Aguilar's planned social media posts before issuing him shares. After the discussion the board authorized the issuance. Adrian received the shares and later sought to enforce rights attached to them.
Apollo Energy agreed to lower the price on an existing supply contract after National Metal Crafters threatened to walk away. In exchange National Metal Crafters promised to continue performance. Apollo later claimed the modification lacked consideration because the new terms were less favorable.
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Ava Adebayo quit her job and moved in with Anthony Arnold after he promised to share all property acquired during their relationship. Years later when they separated Ava sought division of assets under the agreement. Anthony argued the promises lacked adequate consideration.
Alfred Ashford threatened a malpractice suit against his former law firm. The firm paid him $20,000 in exchange for a written release. The firm later sued to recover the money arguing the release lacked consideration because the claim was weak.
Abigail Alvarez signed a release of all claims against her employer in exchange for a severance payment after alleging wrongful termination. The employer later argued the release was unenforceable for lack of adequate consideration.
Andre Antoine and Alpine Mining's founder lived together for years under an oral agreement to pool earnings and share assets. After separation Andre sought enforcement of the agreement. The founder claimed the promises were unsupported by consideration.
Courts generally do not inquire into the adequacy of consideration when deciding whether a contract is supported by consideration. The focus remains on whether a bargained-for exchange occurred rather than on the fairness of the values exchanged.
Token consideration such as one dollar can satisfy the requirement if it is bargained for. Courts treat the existence of a bargain as decisive and do not weigh the economic equivalence of the exchange.
Forbearance or surrender of a genuinely doubtful claim supplies consideration even if the claim later proves invalid. The law protects reasonable good-faith compromises without requiring the claim to be ultimately meritorious.
A return promise can support consideration even when the promisor's performance benefits a third party. The key is that the promise was sought and given in exchange for the other party's undertaking.
…95 Cal. App.2d 599, 603 [213 P.2d 727] states the opposite. A promise to perform homemaking services is, of course, a lawful and adequate consideration for a contract (see Taylor v. Taylor (1954) 66 Cal. App.2d 390, 398 [152 P.2d 480]) — otherwise those engaged in domestic employment could not sue for their wages — and defendant…