Also known as: legal considerations · consideration
Written by attorneys · grounded in primary & secondary sources — see below
A bargained-for exchange of value between parties to a contract that renders the promise enforceable. The value may consist of an act, a forbearance, or a return promise received by the promisor from the promisee.
Lucas Lee, facing default on a mortgage held by Lone Peak Energy, transfers title to the encumbered parcel directly to the lender. In exchange the lender cancels the remaining balance on the note. The discharge of the debt supplies the required legal consideration for the voluntary transfer, allowing the lender to avoid foreclosure proceedings.
The President transmits a message to Congress proposing new legislation on infrastructure funding. Congress treats the message as a formal recommendation. The exchange does not create contractual obligation or supply legal consideration because no bargained-for value passes between private promisor and promisee.
Select any source to read its text and confirm it supports the definition.
Layla Lane offers Lotus Pharmaceuticals $75,000 to resolve a pending product-liability claim. At trial Lotus seeks to introduce the offer to show that Layla's damages are modest. Because the offer was made in compromise negotiations, the evidence is inadmissible to prove the validity or amount of the claim under the evidence rule.
Leonard Lowe promises to watch over Lorenzo Lugo's elderly parent while Lorenzo is away. Leonard fails to check on the parent, who falls and is injured. Although the undertaking was gratuitous, the Restatement imposes liability for negligent performance of the assumed duty regardless of whether legal consideration was given.
A jury awards Lance Lee $500,000 in compensatory damages and $10 million in punitive damages against Lakeshore Industries. On appeal the court examines the ratio between the two awards as one of three guideposts. The presence of substantial compensatory damages frames the constitutional excessiveness inquiry but does not constitute legal consideration.
Lucy Liu and her spouse sign a marital property agreement that reallocates future earnings. The document is enforceable even though neither spouse provides additional payment. The mutual promises in the signed record satisfy the requirement that a marital property agreement need not rest on legal consideration.
The party must demonstrate that each side received something bargained for, such as an act, a forbearance, or a return promise. Courts examine whether the exchange motivated the promisor and whether the promisee suffered a legal detriment. Without this mutual exchange the promise is unenforceable for lack of consideration.
Yes. The discharge of the underlying debt supplies the necessary legal consideration for the mortgagor's voluntary transfer of title. Courts also examine whether the transaction was free from duress or unfairness.
Yes. Under the Uniform Marital Property Act a marital property agreement signed by both spouses is enforceable without consideration. The same rule appears in related uniform acts governing premarital and probate elections.
…of any information obtained as a consequence. Nor can it be claimed that judicial time and effort, assuming that is a relevant consideration, will be conserved because of the ease of application of the new rule. Today's decision leaves open such questions as whether the accused was in custody, whether his statements were…