Elements of consideration

•  Parties to a contract, as a general rule, are not bound unless consideration is given by both of them.

•  Consideration is a promise by the offeror in return for either money or property or a sacrifice by the offeree. Sacrifice (called legal detriment) consists of doing an act (or promising to do an act) or refraining (or promising to refrain) from an act.

•  A promise to make a gift is unenforceable because a transfer of property is made by one party without return consideration from the other party.

•  The presence of consideration in an agreement is important, not the adequacy of that consideration, unless there is evidence of fraud, duress, or undue influence, or if the contract is grossly unfair (unconscionable).

•  A moral promise (e.g., based on love and affection) is no more enforceable than any other promise unsupported by consideration.

•  Past consideration is no consideration. The offeror, for example, is not bound by a promise to pay money for an act performed prior to the promise.

•  Performing or promising to perform an existing obligation is not consideration unless the offeree does something in addition to what is required by the existing agreement.

•  If a debtor and creditor disagree over the amount of a debt, they may compromise on an amount lower than the original debt. The consideration for the creditor’s agreement to accept the compromise amount is the debtor’s surrender of the right to go to court to determine the correct amount.

•  Pledges to charitable, religious, educational, or scientific organizations are usually enforceable without consideration.