contract-law legal-terms consideration
What counts as consideration in contract law?
<p>What counts as consideration in contract law? Does consideration from party A have to be to the benefit of the party B?</p>

<p>See generally <em>Hamer v. Sidway</em> (1891), <a href="https://www.nycourts.gov/reporter/archives/hamer_sidway.htm" rel="nofollow noreferrer">124 NY 538</a>, citing indirectly <em>Currie v Misa</em> (1875) LR 10 Ex 893:</p>
<blockquote>
<p>'A valuable consideration in the sense of the law may consist either in some right, interest, profit or benefit accruing to the one party, <strong>or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other</strong>.' Courts 'will not ask whether the thing which forms the consideration does in fact benefit the promisee or a third party, or is of any substantial value to anyone. <strong>It is enough that something is promised, done, forborne or suffered by the party to whom the promise is made as consideration for the promise made to him</strong>.</p>
</blockquote>

<p>Pretty much anything that is neither illegal nor a pre-existing obligation can be consideration. A necessary pre-condition for any trade or contract is a different valuation of whatever is being traded. Inherent in that is that judges and legislators would value it differently.</p>
<p>Given that,  who is to say that a contract with a surgeon to save the life of someones daughter, mother, pool boy, isn’t valuable to the non-surgeon party? An overgrown lawn on someone else’s property.</p>
<p>Unconscionable contracts are a different matter, because they inherently involve either a reevaluation or someone else having an interest that wasn’t addressed.</p>

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<p>Consideration is usually an element of a valid contract. But consideration is not required at all for a personal guarantee of a debt, for marital agreements entered into during a marriage, or for some (but not all) forms of contract modifications (usually singled out by statute).</p>
<p>Any benefit to one party, or detriment assumed by the other party, can constitute consideration. Consideration is often money, but it can involve mutual promises, giving up claims in a lawsuit, services, goods, promises to refrain from action, or almost anything else that is not specifically prohibited.</p>
<p>Consideration in U.S. common law, however, cannot be &quot;meretricious&quot; (i.e. for having sex) or otherwise illegal (e.g. illegal drugs or a contract to murder someone). Likewise &quot;love and affection&quot; or other donative intent directed at the other party to the contract is not consideration.</p>
<p>The benefit or detriment could be to someone related to, or intended to be benefited by, a party to the contract rather than to the contracting party.</p>
<p>The consideration does not have to be proportionate to the contract validated by the consideration. Instead, the prevailing theory of consideration in the United States is the &quot;<a href="https://en.wikipedia.org/wiki/Peppercorn_(law)" rel="nofollow noreferrer">peppercorn  theory</a>&quot;.</p>
<blockquote>
<p>In legal parlance, a peppercorn is a metaphor for a very small cash
payment or other nominal consideration, used to satisfy the
requirements for the creation of a legal contract. It is featured in
<em><a href="https://en.wikipedia.org/wiki/Chappell_%26_Co_Ltd_v_Nestle_Co_Ltd" rel="nofollow noreferrer">Chappell &amp; Co Ltd v Nestle Co Ltd</a></em> ([1960] AC 87), which stated that &quot;a peppercorn does not cease to be good consideration if it is
established that the promisee does not like pepper and will throw away
the corn&quot;.</p>
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<p>The main kind of contract that is rendered unenforceable by the consideration doctrine in the U.S. is a promise to make a gift in the future.</p>
<p>Another common application of the consideration requirement is to invalidate a contract modification (in a type of contract where consideration is required for a contract modification) which is entirely one sided.</p>
<p>Under the doctrine of <a href="https://lawshelf.com/shortvideoscontentview/contract-law-promissory-estoppel-as-a-substitute-for-consideration" rel="nofollow noreferrer">promissory estoppel</a>, detrimental reliance on a promise can substitute for consideration.</p>
<p>Inadequacy of consideration, when there is some consideration to support the contract, is governed by the doctrine of unconscionability as between the parties to the contract.</p>
<p>If the parties to the contract do not exchange &quot;substantially equivalent value&quot; then a buyer in a contract is not a &quot;bona fide purchaser for value&quot; (which impacts the ability of a third-party to challenge the validity of the contract vis-a-vis their rights) and the contract could be a &quot;fraudulent transfer&quot; which can be undone by a third-party creditor if the person on the losing side of the deal is insolvent.</p>
