Valuable Consideration

Definition

Valuable consideration is a fundamental principle in contract law. It represents something of value that is promised, given, or transferred by one party (the “promisor”) to another party (the “promisee”) in exchange for some other value. This value could be monetary, an extension of time, labor, services, or any other tangible benefit. Valuable consideration is what gives legality and enforceability to a contract under most legal systems.

Example

Real Estate Purchase: A buyer agrees to pay $200,000 for a house. The money from the buyer forms the valuable consideration for the sale.
Service Contract: A homeowner promises to pay a contractor $10,000 to renovate the house. The agreed-upon fee acts as valuable consideration, making the contract enforceable.
Employment Agreement: An employee agrees to perform certain duties for an employer in return for a salary. The salary constitutes valuable consideration for the work performed.

Frequently Asked Questions

What is the distinction between valuable and good consideration?

Valuable consideration involves something quantifiable and of tangible economic value, such as money, services, or property. Good consideration refers to something sentimental or moral, like love and affection, which is typically not sufficient to form a legally binding contract.

Can love and affection be considered valuable consideration?

No, love and affection are generally seen as good consideration rather than valuable consideration. While they may be reasons for entering contractual relationships, they lack the tangible economic value required for legal enforceability.

Is consideration necessary for all contracts?

Yes, most standard contracts require consideration. Without valuable consideration, a contract may be deemed void and unenforceable.

Can consideration be something other than money?

Yes, consideration can include services, property, a promise to act or refrain from acting, an extension of time, an assumption of risks, etc., as long as it has economic value.

Contract: A legally binding agreement between two or more parties.
Promisee: The party to whom a promise is made.
Promisor: The party making a promise.
Consideration: The value promised in a contract, which gives it value in the eyes of the law.
Good Consideration: A promise made out of love, affection, or moral duty, which generally lacks the economic value required for legal enforcement.
Promissory Estoppel: A legal principle that enforces certain promises, even without consideration, to avoid injustice.

Online Resources

References

“Contract Law: A Straightforward Guide” by Adam Rose
“Business Law: The Ethical, Global, and E-Commerce Environment” by Jane P. Mallor, A. James Barnes, Thomas Bowers, Arlen W. Langvardt.

Suggested Books for Further Studies

“Principles of Contract Law” by Steven J. Burton: An in-depth look into the principles governing contract law with a strong emphasis on consideration.
“The Law of Contracts and the Uniform Commercial Code” by Pamela Tepper: A practical guide to understanding contract law, including valuable consideration.
“Business Law: Text and Cases” by Kenneth W. Clarkson, Roger LeRoy Miller, Frank B. Cross: A comprehensive textbook covering various aspects of business law, including an exhaustive section on contracts and valuable consideration.

Real Estate Basics: Valuable Consideration Fundamentals Quiz

### Which of the following best defines "valuable consideration"? - [ ] An emotional benefit - [x] A benefit of economic value - [ ] A promise that can never be enforced - [ ] A verbal agreement > **Explanation:** Valuable consideration refers to something of tangible economic value, such as money, property, or services. ### Which of the following can be considered valuable consideration? - [x] Money - [x] Services - [x] Property - [ ] Love and affection > **Explanation:** Money, services, and property all have economic value, making them eligible as valuable consideration, unlike love and affection. ### Is valuable consideration necessary for a contract to be enforceable? - [x] Yes - [ ] No - [ ] Only in certain circumstances - [ ] Not relevant to enforceability > **Explanation:** Valuable consideration is typically required for a contract to be enforceable under standard contract law principles. ### Can love and affection form a contract? - [x] No, they are considered good consideration - [ ] Yes, they are a form of valuable consideration - [ ] Only if mutually agreed upon - [ ] Sometimes, based on jurisdiction > **Explanation:** Love and affection are categorized under good consideration and generally lack the economic value required for enforceability. ### What is the main difference between good consideration and valuable consideration? - [ ] One is verbal, and the other is written - [x] One has tangible economic value, the other does not - [ ] One pertains to goods, the other pertains to services - [ ] There is no difference > **Explanation:** Good consideration lacks tangible economic value (e.g., love, affection), while valuable consideration involves economic value (e.g., money, services). ### Which of the following is a scenario of valuable consideration? - [ ] A father gives his daughter a car out of love. - [x] A woman pays a contractor to renovate her kitchen. - [ ] A friend promises to help with a move with no strings attached. - [ ] Grandparents gifting money to their grandchildren. > **Explanation:** Paying a contractor for renovation involves a tangible exchange of economic value, hence qualifying as valuable consideration. ### What purpose does valuable consideration serve in a contract? - [ ] To express goodwill and affection - [ ] To provide a simple promise - [x] To create a legally enforceable obligation - [ ] To assure verbal agreements > **Explanation:** Valuable consideration makes the contract legally enforceable as it involves a mutual exchange of value. ### Which statement about valuable consideration and contract enforceability is true? - [x] Without valuable consideration, a contract may not be legally enforceable. - [ ] Valuable consideration can always be substituted with love. - [ ] A contract does not require valuable consideration to be legally binding. - [ ] Verbal agreements always qualify as having valuable consideration. > **Explanation:** Contracts generally need valuable consideration to be legally enforceable; it ensures mutual economic value exchange. ### Valuable consideration could NOT include which of the following? - [x] An emotional promise without tangible backing - [ ] A one-year lease agreement - [ ] An extension of service contract timeline - [ ] A promise backed by a sum of money > **Explanation:** An emotional promise lacks the economic value component necessary for valuable consideration. ### When valuable consideration is absent, what might enforce a promise? - [ ] Enforceable Love Laws - [ ] Mutual Verbal Agreement - [x] Promissory Estoppel - [ ] Implied Affection > **Explanation:** Promissory Estoppel may enforce such promises to avoid injustice, especially when the promisee relies upon the promise to their detriment.