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Concept
Consideration
Résumé
Consideration is a concept of English common law and is a necessity for simple contracts but not for special contracts (contracts by deed). The concept has been adopted by other common law jurisdictions.
The court in Currie v Misa declared consideration to be a “Right, Interest, Profit, Benefit, or Forbearance, Detriment, Loss, Responsibility”. Thus, consideration is a promise of something of value given by a promissor in exchange for something of value given by a promisee; and typically the thing of value is goods, money, or an act. Forbearance to act, such as an adult promising to refrain from smoking, is enforceable if one is thereby surrendering a legal right.
Consideration may be thought of as the concept of value offered and accepted by people or organisations entering into contracts. Anything of value promised by one party to the other when making a contract can be treated as "consideration": for example, if A contracts to buy a car from B for 5,000, and B's consideration is the promise of the car.
Additionally, if A signs a contract with B such that A will paint B's house for 500 paid to A. Further if A signs a contract with B such that A will not repaint his own house in any other colour than white, and B will pay A 500 per year. Conversely, if A signs a contract to buy a car from B for $0, B's consideration is still the car, but A is giving no consideration, and so there is no valid contract. However, if B still gives the title to the car to A, then B cannot take the car back, since, while it may not be a valid contract, it is a valid gift.
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