PREMIUM LEGAL RESOURCES
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The inducement, price or motive that causes a party to enter into an agreement or contract.
Something of value that is given in exchange for getting something from another person. For example, rent payments paid to receive the right to rent an apartment.
A compensation which is paid, or all inconvenience suffered by the party from whom it proceeds. Or it is the reason which moves the contracting party to enter into the contract. A cause or occasion meritorious requiring a mutual recompense in deed or in law. A consideration of some sort or other is so absolutely necessary to the forming a good contract that a nudum pactum, or an agreement to do or to pay any thing on one side without any compensation to the other, is totally void in law, and a man cannot be compelled to perform it. But contracts under seal are valid without a consideration or perbaps, more properly speaking, every bond imports in itself a sufficient consideration though none be mentioned. Negotiable instruments, as bills of exchange and promissory notes, carry with them prima facie evidence of consideration.
The consideration must be some benefit to the party by whom the promise is made, or to a third person at his instance; or some detriment sustained at the instance of the party promising by the party in whose favor the promise is made.
Considerations are good when they are for natural love and affection; or valuable when some benefit arises to the party to whom they are made, or inconvenience to the party making them.
They are legal, which are sufficient to support the contract or illegal, which render it void. If the performance be utterly impossible, in fact or in law, the consideration is void.
A mere moral obligation to pay a debt or perform a duty is a sufficient consideration for an express promise, although no legal liability existed at the time of making such promise. But it is to be observed that in such cases there must have been a good or valuable consideration; for example, every one is under a moral obligation to relieve a person in distress, a promise to do so, however, is not binding in law. One is bound to pay a debt which he owes although he has been released; a promise to pay such a debt is obligatory in law on the debtor and can therefore be enforced by action.
In respect of time, a consideration is either: Executed, or Something done before the making of the obligor's promise. In general, an executed consideration is insufficient to support a contract but an executed consideration on request or by some previous duty, or if the debt be continuing at the time, or it is barred by some rule of law, or some provision of a statute as the act of limitation, it is sufficient to maintain an action; Executory, or something to be done after such promise; Concurrent, as in the case of mutual promises, and; A continuing consideration.
When the consideration turns out to be false and fails there is no contract as, for example, if my father by his will gives me all his estate, charged with the payment of a thousand dollars, and I promise to give you my house instead of the legacy to you, and you agree to buy it with the legacy, and before the contract is completed and I make you a deed for the house, I discover that my father made a codicil to his will and by it he revoked the gift to you, I am not bound to complete the contract by making you a deed for my house.