payment made in exchange for performance of a contract; something of value given by one party to another in order to induce (=persuade, encourage, convince) the other to contract; anything given or promised by one party in exchange for the promise or action of another. In common law systems, consideration is a necessary element for an enforceable contract.
As used in this section, 'total consideration paid or contracted to be paid' includes money or anything of value, paid or delivered or contracted to be paid or delivered in return for the sale.
if you take something into consideration then you think about it, especially when you are making important decision
The court did not take the recent ruling into consideration when deciding whether there had been a violation of the law.
careful thought about a particular fact or issue, especially when you are making important decision
The matter has received our closest and most careful consideration.
a fact or issue that you think about, especially when you are making important decision
There were some practical considerations to be taken into account before the work could begin.
Hi and welcome to TransLegal’s lesson of the week. Today we’re going to be talking about consideration in contract. Now this is a commonly confused term because it really doesn’t exist outside of common law contract, but in the context of contract law consideration is a vital element required to form a contract. Along with an offer, acceptance and the intent to create legal relations, consideration is fundamental. As a general rule, a contract is not enforceable if there is no consideration. So what is consideration? Well it’s the thing that’s done or given or the promise to do so by one party of the contract in exchange for the act or promise of the other party to the contract. The idea is that in order for a party to enforce a promise they must be given something quid pro quo for it, which begs the question, what’s quid pro quo? Well quid pro quo is a Latin expression which means something for something. It just signifies an equal exchange or substitution that one makes with another in return for something done or given or promised. So consideration therefore is payment in any form under a contract, whether it’s cash, shares, property, bananas, etc. That’s it for today. If you have any questions about consideration, please leave them in the comments section below and myself or one of my colleagues will be happy to get back to you. Thanks.
The contract is binding provided that consideration passes between the parties.
There must be an exchange of consideration between the parties.
Past consideration cannot be used as a basis to form a new contract.
The contract is unenforceable for lack of sufficient consideration.
In exchange for good and valuable consideration, the receipt and sufficiency of which I acknowledge…
In consideration of the mutual promises made herein…
The models under consideration are made by the same firm.
Three issues remain for consideration in this phase of the trial
We received an opinion from counsel giving consideration to the types of claims available.
Aggregate Consideration is defined and computed as follows: The total sale proceeds and other consideration received (which shall be deemed to include amounts paid into escrow) by the Company and/or its shareholders or …
Frequently Asked Question: What is consideration in a contract?
In the context of contract law, consideration is a vital element required to form a contract (along with offer, acceptance and an intention to create legal relations). As a general rule, a contract is not enforceable if there is no consideration. It is something done or given, or the promise to do so, by one party to the contract in exchange for the act or promise of the other party. The idea is that, in order for a party to enforce a promise, they must have given something in return. Consideration is, therefore, payment in any form under a contract (such as cash, shares, property, bananas, etc.).
Consideration in common law systems
The concept of consideration is one of the most troubling for many lawyers in civil law jurisdictions. In order to be binding in a civil law jurisdiction, there must be an offer, an acceptance and an intention to be bound. In common law jurisdictions, there is one additional element: consideration. The concept of consideration was deemed necessary to provide the best evidence of a bargained-for exchange and an intention to be bound (rather than a mere promise to give or donate something).
Even if both parties intend to enter into a binding contract, an agreement may be declared invalid if it does not contain the required consideration element. Most contracts contain easily identifiable clauses which satisfy the consideration requirement. But consideration does not always constitute monetary payment. Instead, both parties often promise to perform some action in the future or something else of value. This requirement is often overlooked (thereby making a licence unenforceable) in intra-company licence agreements or assignments.
The validity of consideration may be subject to attack on the basis that it is illusory or redundant (eg one party receives only what the other party was already obligated to provide), or that there is a lack of consideration (eg the consideration received by one party is nonexistent or essentially worthless). A party which has a pre-existing legal duty to do something does not provide consideration when promising merely to uphold that duty.
However, these defenses do not mean that a party can escape the consequences of poor negotiation. In general, the amount of consideration does not have to equal the true “value” of the contract. In fact, in order to satisfy the consideration requirement, contracts in the United States often have one party provide nominal consideration (typically $1) as evidence of an intention to be bound. It should be noted, however, that some state courts have found that such nominal consideration is insufficient to satisfy the purpose of the consideration requirement. Still today, many licensing (and other) contracts that do not involve any money at all will often cite as consideration, “for the sum of $1 and other good and valuable consideration”. If analysed under state law, these contracts may very well be found invalid.