Also known as: good consideration · valuable consideration
Written by attorneys · grounded in primary & secondary sources — see below
Something of value such as an act, a forbearance, or a return promise bargained for and received by a promisor from a promisee. The exchange must involve a measurable economic detriment or benefit that the law recognizes as sufficient to support enforcement of a promise.
Maria accused Keller & Ross of mishandling her case and threatened suit. The managing partner replied by offering a full refund plus payment of new counsel fees if Maria agreed not to file suit. Maria later sought to introduce the email at trial to prove malpractice. The court excluded the email because the refund and fee payment constituted valuable consideration offered to compromise a disputed claim.
Allied Development conveyed an office building to Stephen by unrecorded deed in settlement of a zoning suit. State A later purchased the same building from Allied for 2.4 million dollars cash and recorded first. State A officials had reviewed public minutes describing the prior pledge but dismissed them as political. Because State A paid valuable consideration yet had inquiry notice of Stephen's interest, it failed to qualify as a bona fide purchaser and Stephen prevailed.
Select any source to read its text and confirm it supports the definition.
Gavin Grant accepted a bill of exchange from a seller in payment for land whose title later proved defective. Gordon Gray, a citizen of another state, acquired the bill before maturity in exchange for canceling a prior debt. Gray sued on the bill. Because Gray took the instrument as a bona fide holder for valuable consideration without notice of the underlying fraud, he recovered despite the land-title defects.
Gareth Glover's uncle promised him 5,000 dollars if he refrained from drinking and gambling until age twenty-one. Gareth fully performed the requested forbearance. When the uncle's estate refused payment, Gareth sued. The court enforced the promise because Gareth's voluntary restriction of his lawful freedom constituted valuable consideration supporting the contract.
Gino Giordano conveyed a large tract to Fletcher for valuable consideration paid in cash. Years later the state legislature attempted to rescind the grant on grounds of fraud in the original sale. The Supreme Court held the conveyance valid and protected because Fletcher had given valuable consideration and the contract could not be impaired by subsequent legislative action.
Giselle Guerrero accepted an at-will position with Glacier Energy after the company promised continued employment in exchange for her agreement to arbitrate disputes. When Glacier later terminated her, Giselle claimed the arbitration clause lacked consideration. The court upheld the clause because Glacier's promise of employment and Giselle's promise to work supplied mutual valuable consideration sufficient to support the agreement.
Yes. When a party offers money or other measurable value conditioned on the other side dropping a claim, the offer supplies valuable consideration within the meaning of the compromise rule. Courts therefore exclude evidence of the offer when it is introduced to prove liability or damages.
The purchaser must show an exchange of something of measurable economic value, such as cash or other property, given in good faith without actual or inquiry notice of a prior unrecorded interest. Payment alone is insufficient if the purchaser had reason to investigate further.
Yes. When a party voluntarily restricts lawful freedom of action, such as refraining from drinking or gambling, in exchange for a promise, the forbearance supplies valuable consideration even if the promisor receives no direct benefit.
…sale. The bill accepted had been received bona fide and before it was due. A bona fide holder of a negotiable instrument for a valuable consideration, without any notice of facts which implicate its validity as between the antecedent parties, who takes it under an indorsement made before it becomes due, holds title unaffected by those…