Elements of Consideration
Ask the Instructor Video: Agreement and Consideration: What is consideration?
Case 12.1: Hamer v. Sidway
Court of Appeals of New York, Second Division, 1891. 124 N.Y. 538, 27 N.E. 256.
Often, consideration is broken down into two parts: (1) something of
legally sufficient value
must be given in exchange for the promise; and
(2) usually, there must be a
The "something of legally sufficient value" may consist of (1) a promise to do something that one has no prior legal duty to do, (2) the
performance of an action that one is otherwise not obligated to undertake, or (3) the refraining from an action that one has a legal right to
undertake (called a
). Consideration in bilateral contracts normally consists of a promise in return for a promise, as explained
in Chapter 10. For example, suppose that in a contract for the sale of goods, the seller promises to ship specific goods to the buyer, and the
buyer promises to pay for those goods when they are received. Each of these promises constitutes consideration for the contract.
In contrast, unilateral contracts involve a promise in return for a performance. Suppose that Anita says to her neighbor, "When you finish
painting the garage, I will pay you $100." Anita's neighbor paints the garage. The act of painting the garage is the consideration that creates
Anita's contractual obligation to pay her neighbor $100.
What if, in return for a promise to pay, a person refrains from pursuing harmful habits (a forbearance), such as the use of tobacco and