Valuable Consideration


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Valuable Consideration

In the formation of a valid and binding contract, something of worth or value that is either a detriment incurred by the person making the promise or a benefit received by the other person.

In contract law consideration is required as an inducement to enter into a contract that is enforceable in the courts. It is an essential element for the formation of a contract. What constitutes sufficient consideration, however, has been the subject of continuing legal debate. Contracts and courts generally use the term valuable consideration to signify consideration sufficient to sustain an enforceable agreement.

In general, consideration consists of a promise to perform a desired act or a promise to refrain from doing an act that one is legally entitled to do. Thus, a person who seeks to enforce a promise must have paid or obligated herself to pay money, delivered goods, expended time and labor, or forgone some other profitable activity or legal right. For example, in a contract for the sale of goods the money paid is the valuable consideration for the vendor, and the property sold is the consideration for the purchaser.

In early Common Law nominal consideration was sufficient to establish a contract. The consideration could be as small as a peppercorn or a cent as long as it demonstrated that the parties intended to enter into an agreement. Eventually, the courts developed the requirement of valuable consideration, but what constitutes it has varied over time. Valuable consideration does not necessarily have to be equal in value to what is received, and it need not be translatable into dollars and cents. It is sufficient for the consideration to consist of a performance or a promise to perform that the promisor (the person making the promise) regards as having value. It is not essential that the person to whom the consideration moves should be benefited, provided the person from whom it moves is, in a legal sense, injured. The injury can consist of refusing to sue on a disputed claim or to exercise a legal right. The alteration in position is regarded as a detriment that forms consideration independent of the actual value of the right relinquished.

valuable consideration

n. a necessary element of a contract, which confers a benefit on the other party. Valuable consideration can include money, work, performance, assets, a promise, or abstaining from an act. (See: contract, consideration)

VALUABLE CONSIDERATION, contracts. An equivalent for a thing purchased. Vide Vin. Ab. Consideration, B; 2 Bl. Com. 297; Consideration.

References in periodicals archive ?
(195) Using the [section] 10307 as a model, the exchange of mutual promises to vote for a specific candidate should fall within the scope of California's Election Code [section][section] 1852's statutory language "valuable consideration." (196)
Nevertheless, under the original language of NOTA, the receipt of the kidney in exchange for an organ donation would surely constitute "valuable consideration." (126) The 1984 law was amended to allow such kidney-for-kidney sales.
Kidney chains were not included in this amendment, probably because they were "a new and rare method [of donation] at that time." (74) But Congress's reasons for excluding KPD from NOTA's prohibition on trading organs for valuable consideration apply with equal force to NEAD chains.
Such a bargained-for exchange satisfies the common-law contract requirement of consideration and, because the bridge donor receives a benefit in exchange for her kidney, which raises the question of whether "valuable consideration" has been received in violation of NOTA section 301.
The problem here is, once again, an exchange of valuable consideration for the naming of the owner/insured's co-business owner as the beneficiary.
Plaintiffs' attorneys may attempt to argue that the fee an agent or broker receives for placing insurance is a form of "money or other valuable consideration" such that the broker or agent will be held for any misclassification of workers on insurance application forms.
But if the testate does not have heirs who are entitled to a portion of an inheritance, he could freely dispose of his inheritance either through documents with gratuitous use, or through documents for good and valuable consideration.
However, under the transfer for value rule, this exclusion is not available if the life insurance contract is transferred for a "valuable consideration" (i.e., sold).
There is valuable consideration of the extent to which apparently secular movements, among them Oxfam and Amnesty International, can be considered faith-based and even faith-inspired.
There are few exceptions, such as when a life insurance policy has been transferred for valuable consideration. But the potential income distribution is equally significant because of the tax advantages that apply to a policy's cash value.
Here is an overview of some of the comments being made by organizations, and individuals on the pros and cons of the lawsuit and the IJ's challenge over the NOTA valuable consideration ban on offering compensation (in some form) to bone marrow donors.
Under the transfer for value rule, if a policy is transferred for a valuable consideration, the death proceeds will be taxable as ordinary income, except to the extent of the consideration, the net premiums and certain other amounts paid by the transferee.