Consideration

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Consideration is a concept of English common law where a promise of something of value is given in exchange for something of value. It is a necessity for simple contracts but not for special contracts (contracts by deed). The concept has been adopted by other common law jurisdictions. It is commonly referred to as one of the six or seven elements of a contract. The court in Currie v Misa declared consideration to be a "Right, Interest, Profit, Benefit, or Forbearance, Detriment, Loss, Responsibility". 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 only if one is thereby surrendering a legal right. 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, A's consideration is the promise of $5,000, and B's consideration is the promise of the car. Consideration may be a good, service, or agreement to do or not do anything stipulated. It is essential that the consideration promised be worth something in value in order for a valid contract to be made.