Also known as: valuable consideration
Written by attorneys · grounded in primary & secondary sources — see below
A benefit, performance, or item that possesses legal or economic worth and can serve as consideration in a contract or support a legal status such as that of a bona fide purchaser. The term encompasses property transfers, services, promises, releases of claims, and other advantages that advance a transaction or enterprise.
Omega Trade sent Sigma Outlet a demand letter alleging breach of an exclusive supply agreement. Sigma's negotiator replied with an email offering a $1.2 million payment in exchange for a full release of claims. When Omega later sought to introduce the email at trial to prove liability, the court excluded it because the payment constituted something of value furnished during compromise negotiations.
Allied Development conveyed an office building to Stephen by deed that Stephen never recorded. State A later bought the same building from Allied for $2.4 million and recorded its deed first. Because State A paid valuable consideration without notice of Stephen's prior interest, it prevailed under the recording statute.
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Yes. A promise to forbear from suing or to release a claim constitutes something of value when the claim is genuinely doubtful as to fact or law at the time of the bargain. Conflicting expert reports on code similarity made an infringement claim doubtful, so the release supplied valid consideration for a settlement payment.
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Yes. A partner's contribution includes not only property but also services performed or promised and other benefits such as securing favorable contracts. A machinist's agreement to run production shifts without wages and a partner's negotiation of a discounted supply contract each supplied something of value that counted toward profit allocation.
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The purchaser does not qualify as a bona fide purchaser and loses priority under a race-notice or notice recording act. Public minutes and newspaper articles describing a prior conveyance put the buyer on inquiry notice, so the unrecorded deed holder prevailed despite the later cash purchase and recording.
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