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consideration:
1. Something (such as an act, forbearance, or a return promise) bargained for and received by a promisor from a promisee; that which motivates a person to do something, esp. to engage in a legal act. * Consideration, or a substitute such as promissory estoppel, is necessary for an agreement to be enforceable. See Restatement (Second) of Contracts § 81 (1979).[1]
1. An essential of a valid and enforceable contract. 17 Am J2d Contr § 86; a matter of contract, something within the contemplation of the parties to the contract. Van Houten v Van Houten, 202 Towa 1085, 209 NW 293; the price – bargained and paid for a promise, in other words, something given in exchange for the promise. 17 Am J2d Contr § 85; a benefit to the promisor or a loss or detriment to the promisee. Test v Heaber| lin, 254 Towa 521, 118 NW2d 73; 11 Am J2d Ba N § 216; some right, interest, profit, or benefit accruing to one party to a contract, or some forbearance, detriment, loss, or responsibility giver, | suffered or undertaken by the other. 17 Am Jd Contr $85; 11 Am J2d B & N § 216; an act or a forbearance, the creation, modification, of destruction of @ legal relation, of a return promise bar-/ gained for and given in exchange for a promise. 17 Am J2d Contr § 85. [2]
1. Something (as an act or forbearance or the promise thereof) done or given by one party for the act or promise of another. Except in Louisiana, consideration is a necessary element to the creation of a contract. The consideration must result from bargaining by the parties, and must be the thing that induces the mutual promises. [3]
“A ‘consideration’ has been explained to be ‘any act of the plaintiff from which the defendant, or a stranger, derives benefit or advantage, or any labour, detriment, or inconvenience sustained by the plaintiff, however small the detriment or inconvenience may be, if such act is performed or inconvenience suffered by the plaintiff with the assent, express or implied, of the defendant, or, in the language of pleading, at the special instance and request of the defendant.’” Thomas E. Holland, The Elements of Jurisprudence 286 (13th ed. 1924).
“A consideration in its widest sense is the reason, motive, or inducement, by which a man is moved to bind himset by an agreement. It is not for nothing that he consents to impose an obligation upon himself, or to abandon o transfer a right. It is in consideration of such and such a fact that he agrees to bear new burdens or to forgo the benefits which the law already allows him.” John Salmond, Jurisprudence 359 (Glanville L. Williams ed., 10th ed. 1947).
“The word ‘consideration’ has been around for a long time, so it is tempting to think we have had a theory of consideration for a long time. In fact until the nineteenth century the word never acquired any particular meaning or stood for any theory.” Grant Gilmore, The Death of Contract 18 (1974).
“in the late fifteenth and early sixteenth centuries the word ‘consideration’ was very familiar to lawyers, and althou it had not yet acquired a special legal meaning (and indeed was not to do so during the period under discussion) it had already begun to develop legal associations. MoST commonly it was used in statutes. … in the statutes of Henry vV’ it became quite common for the draftsman, after he had rehearsed the circumstances to introduce the enacting part with a clause in the following (or similar) form: ‘The King, considering the premisses, of the Assent and Request aforesaid, hath ordained and established … .’ In the course of time the matters which were considered, and to which consideration was given, came themselves to be called ‘the considerations.’ [By the late 15th century] the considerations were the matters considered; they were the factors which Parliament or the King was supposed to have had in mind in legislating, and which moved or motivated the enactment. Loosely the word could be treated as synonymous with ‘cause,’ and both in statutes and elsewhere causes and considerations were often mentioned in the same breath. But ‘cause’ does not mean exactly the same thing as ‘consideration’; it lacks the suggestion of what was in the mind, what was considered, what motivated.” A.W.B. Simpson, Legal Theory and Legal History 332 (1987).
Various forms of consideration:
adequate consideration – (17c) Consideration that is fair and reasonable under the circumstances of the agreement. Cf. sufficient consideration.
“Although courts have not lost the habit of speaking of an ‘adequate,’ a ‘sufficient,’ or a ‘valuable’ consideration, the bargain test as epitomized in the Restatement imposes no such additional requirement.” E. Allan Farnsworth, Contracts § 2.11, at 69-70 (3d ed. 1999).
concurrent consideration – (1847) Consideration arising at the same time as other consideration, or where the promises are simultaneous. > continuing consideration. An act or performance extending over time. » due consideration. 1. See DUE CONSIDERATION. 2. See sufficient consideration. >» executed consideration. (18c) A consideration that has been wholly given; past consideration as opposed to present or future consideration.
executory consideration – (18c) A consideration that is to be given only after formation of the contract; present or future consideration as opposed to past consideration. > express consideration. (17c) Consideration that is specifically stated in an instrument.
fair consideration – (18c) 1. Consideration that is roughly equal in value to the thing being exchanged; consideration given for property or for an obligation in either of the following circumstances: (1) when given in good faith as an exchange for the property or obligation, or (2) when the property or obligation is received in good faith to secure a present advance or prior debt inan amount not disproportionately small as compared with the value of the property or obligation obtained. — Also termed fair and valuable consideration. 2. Consideration that is honest, reasonable, and free from suspicion, but not strictly adequate or full.
future consideration – (1979) 1. Consideration to be given in the future; esp., consideration that is due after the other party’s performance. 2. Consideration that is a series of performances, some of which will occur after the other party’s performance. 3. Consideration the specitics of which have not been agreed on between the parties. Cf. past consideration.
good consideration – (18c) 1. Consideration based on natural love or affection or on moral duty <good consideration, being based purely on affection, does not amount to valuable consideration>. e Such consideration is usu. not valid for the enforcement of a contract. — Also termed meritorious consideration; moral consideration.
“A good consideration is that of blood, or the natural love and affection which a person has to his children, or any of his relatives. . . . A good consideration is not of itself sufficient to support a promise, any more than the moral obligation which arises from a man’s passing his word; neither will the two together make a binding contract; thus a promise by a father to make a gift to his child will not be enforced against him. The consideration of natural love and affection is indeed good for so little in law, that it is not easy to see why it should be called a good consideration …..”” Joshua Williams, Principles of the Law of Personal Property 95-96 (11th ed. 1881). :
“Stated simply, good or meritorious consideration is nothing more than motive or moral obligation.” 3 Williston on Contracts § 7:16, at’ 325-26 (Richard A. Lord ed., 4th ed. 1992).
2. Loosely, valuable consideration; consideration that is adequate to support the bargained-for exchange between the parties <his agreement to pay the offering price was good consideration for the sale>.
gratuitous consideration – (1880) Consideration that, not being founded on any detriment to the party who gives it, will not support a contract; a performance for which a party was already obligated.
grossly inadequate consideration – (1827) Consideration whose value is so much less than the fair value of the object acquired that it may not support finding that the transaction is a valid exchange. ¢ Depending on the surrounding circumstances, the transaction may actually be fraud, a gift, or something else other than a sale and purchase. . > illegal consideration. (18c) Consideration that is contrary to the law or public policy, or prejudicial to the public interest. e Such consideration does not support a contract. | . Be > illusory consideration. (1827) Consideration consist- ing of a promise to perform a public duty or to perform under a preexisting contract. ¢ The promise is unenforceable because the person making the promise was already obliged to perform. See illusory promise under PROMISE. > immoral consideration. (18c) A consideration that so offends societal norms as to be invalid. ¢ A contract supported by immoral consideration is usu. voidable or unenforceable. — Also termed turpis causa. > implied consideration. (18c) Consideration that is inferred by law from the parties’ actions. >» impossible consideration. (1855) Consideration stemming from a promise or performance that cannot be fulfilled.
inadequate consideration – (18c) Consideration that is not fair or reasonable under the circumstances of the agreement.
invented consideration – (1977) Fictional consideration created by a court to prevent the invalidation of a contract that lacks consideration.
nominal consideration – (18c) Consideration that is so insignificant as to bear no relationship to the value of what is being exchanged (e.g., $10 for a piece of real estate). © Such consideration can be valid, since courts do not ordinarily examine the adequacy of consideration (although they do often inquire into such issues as fraud and duress). — Also termed peppercorn.
“Offers made in consideration of one dollar paid or promised are often irrevocable . . . . The irrevocability of an offer may be worth much or little to the offeree, and the courts do not ordinarily inquire into the adequacy of the consideration bargained for. Hence a comparatively small payment may furnish consideration for the irrevocability of an offer proposing a transaction involving much larger sums. But gross disproportion between the payment and the value of the option commonly indicates that the payment was not in fact bargained for but was a mere formality or pretense. In such a case there is no consideration… . Nevertheless, such a nominal consideration is regularly held sufficient to support a short-time option proposing an exchange on fair terms. The fact that the option is an appropriate preliminary step in the conclusion of a socially useful transaction provides a sufficient substantive basis for enforcement, and a signed writing taking a form appropriate to a bargain satisfies the desiderata of form. In the absence of statute, however, the bargaining form is essential: a payment of one dollar by each party to the other is so obviously not a bargaining transaction that it does not provide even the form of an exchange.” Restatement (Second) of Contracts § 87 cmt. b (1979).
other consideration – (18c) Additional things of value to be provided under the terms of a contract, usu. unspecified in the contract, deed, or bill of sale, because they are too numerous to conveniently list, or to avoid public knowledge of the total amount of consideration. — Also termed other good and valuable consideration.
past and there is a subsequent promise to pay therefor, there is no bargain for such past value. Therefore, it cannot constitute consideration.” John Edward Murray Jr., Cases and Materials on Contracts 427 (2d ed. 1976).
sham consideration – Consideration that is of apparent value but not actual value because it does not actually exist or is never actually delivered. ¢ Sham consider ation is often used to make a gift appear to be a contracted-for bargain. > sufficient consideration. (17c) Enough consideration as a matter of law to support a contract. — Also termed due consideration; legally sufficient consideration. Cf. adequate consideration.
valuable consideration – (17c) Consideration that is valid under the law; consideration that either confers a pecuniarily measurable benefit on one party or imposes a pecuniarily measurable detriment on the other. — Also termed good and valuable consideration; legal consideration.
“By a valuable consideration is meant something of value given or promised by one party in exchange for the promise of the other. . . . The thing thus given by way of consideration must be of some value. That is to say, it must be material to the interests of one or the other or both of the parties. It must either involve some gain or benefit to the promisor by way of recompense for the burden of his promise, or it must involve some loss or disadvantage to the promisee for which the benefit of the promise is a recompense.” John Salmond, Jurisprudence 360 (Glanville L. Williams ed., 10th ed. 1947).
2. Parliamentary law. The process by which a deliberative assembly disposes of a motion; DELIBERATION. * Consideration begins after the chair has stated the question on the motion; it ends with the chair putting the question on the motion (or on a subsidiary motion that disposes of the first motion and the assembly voting on it). It also includes debate and may also include (among other things) amendment and referral to a committee.
consideration seriatim – (1875) Consideration serially, whereby a deliberative assembly considers a long or complex motion in a series of readily divisible parts before voting on the entire motion. — Also termed consideration by paragraph (in which case a “paragraph” means not a literary paragraph but any readily divis
2. Parliamentary law. The process by which a deliberative assembly disposes of a motion; DELIBERATION. * Consideration begins after the chair has stated the question on the motion; it ends with the chair putting the question on the motion (or on a subsidiary motion that disposes of the first motion and the assembly voting on it). It also includes debate and may also include (among other things) amendment and referral to a committee.
consideration seriatim – (1875) Consideration serially, whereby a deliberative assembly considers a long or complex motion in a series of readily divisible parts before voting on the entire motion. — Also termed consideration by paragraph (in which case a “paragraph” means not a literary paragraph but any readily divisible part of a motion, which may include more than one literary paragraph); serial consideration. “When a proposition, motion or resolution has many parts (paragraphs, sections, or clauses), or many articles (as a set of bylaws which is up for revision or amendment), it is best and most prudent that no vote be taken on each separate part. Instead, a single vote covering all its parts should be taken after each of them has been duly considered, amended, and perfected. Seriatim (Lat.) literally means ‘serially,’ and when applied to several or more parts of a parliamentary proposal or question it means consideration paragraph by paragraph or part by part.
“Hence, under the doctrine of consideration by paragraph, or seriatim, each part is discussed and may be amended and perfected to suit; then, without putting it to a vote for final adoption, the next part or paragraph is similarly open to discussion and amendment, but is not voted on for final adoption yet; and, in like manner, each additional part is perfected in turn until all the parts of a proposal have been considered.” George Demeter, Demeter’s Manual of Parliamentary Law and Procedure 146 (1969).
informal consideration – Consideration without limit | on how often a member may speak to the same question. ¢ Informal consideration achieves the same freedom of debate as consideration in committee of the whole or quasi committee of the whole, without the fiction of the assembly resolving itself into a committee. See committee of the whole under COMMITTEE (1).
» serial consideration. See consideration seriatim.
3, Something that may be taken into account when
forming an opinion.
irrelevant consideration – (1824) A fact, statement, or other thing that is unrelated to the question to be decided or has no effect on the outcome.
4, Hist. A court’s judgment. — Also termed (in Roman
law) consideratio.
adequate consideration – a consideration that is reasonably equivalent in value to the thing for which it is given fair consideration : a consideration that is reasonable and given in good faith; specif : something with a reasonably equivalent value that under the laws of fraudulent conveyances is given in good faith in exchange for the transfer of property
good consideration – 1 : a consideration based on a family relationship or natural love and affection 2 : VALUABLE CONSIDERATION in this entry ¢ When used as defined in sense 1 good consideration is the opposite of valuable consideration. However good consideration is also sometimes used to mean valuable consideration. Good consideration of the kind denoted by sense 1 cannot create an enforceable contract.
new consideration – something according to section 6-106 of the Uniform Commercial Code that becomes payable in exchange for the transfer of bulk goods
nominal consideration – consideration consisting of a nominal amount
past consideration : something that has already been given or some act that has already been performed that cannot therefore be induced by the other party’s thing, act, or promise in exchange and is not truly a consideration
valuable consideration : a consideration that confers some benefit having pecuniary value on one party to a contract or imposes a detriment having pecuniary value on the other , _
References:
[1]: Black’s Law Dictionary Deluxe Tenth Edition by Henry Campbell Black & Editor in Chief Bryan A. Garner.
[2]: Ballantine’s Law Dictionary Legal Assistant Edition by Jack Ballantine (James Arthur 1871-1949). Doctored by Jack G. Handler, J.D. © 1994 Delmar by Thomson Learning.
[3]: Ballantine’s Law Dictionary with Pronunciations
Third Edition by James A. Ballantine (James Arthur 1871-1949). Edited by William S. Anderson. © 1969 by THE LAWYER’S CO-OPERATIVE PUBLISHING COMPANY.
[4]: Barron’s Law Dictionary Third Edition by Steven H. Hifis (1975, 1991)
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