Question 1

Does consideration have to be equal?

Accepted Answer

No. Courts don't weigh whether the exchange was fair — they just check that something of value was exchanged. You can sell a $100,000 painting for $1, and that's valid consideration. The concept is called 'adequacy of consideration,' and courts almost never second-guess the value parties agreed to.

Question 2

Is a promise not to sue considered valid consideration?

Accepted Answer

Yes — it's called 'forbearance.' If you have a valid legal claim and you agree not to pursue it in exchange for something, that counts as consideration. Settlement agreements work this way: one side drops the lawsuit, the other pays money.

Question 3

Can past actions count as consideration?

Accepted Answer

Generally no. Consideration needs to be something new exchanged at the time of the agreement. If your neighbor already mowed your lawn and you later promise to pay them $50 for it, that promise isn't enforceable — the work was already done. Lawyers call this 'past consideration,' and it doesn't count in most jurisdictions.

Question 4

What happens if there's no consideration in a contract?

Accepted Answer

The contract is unenforceable. A promise without consideration is just a promise — legally, it's a 'gratuitous promise' that courts won't enforce. The exception is promissory estoppel: if someone reasonably relied on your promise and suffered a loss, a court might enforce it anyway. But don't count on it.

Question 5

Do employment contracts need consideration?

Accepted Answer

Yes. For new hires, the job itself is the employer's consideration and the work is the employee's. For existing employees, a new contract (like a non-compete) needs new consideration — a raise, bonus, promotion, or continued employment (though some states don't accept 'continued employment' as enough).

Consideration

Definition

In Practice

Common in these contract types

Related terms

Frequently asked questions about consideration

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