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 ?
S accepted the obligation to repay the loan and this, in and of itself, is valuable consideration.
In specialty literature (13) it was also held the unavailable aspect of the partible inheritance, appreciating that the unavailability is on the one side, relative (because of the gifts made by the defunct are not conformed to the reduction only in the case there are heirs who are entitled to a portion of an inheritance) and on the other side, partial (because it aims only gifts, not the acts for good and valuable consideration, but as well it refers to a certain part from the inheritance, from the inheritance to heirs who are entitled to a portion of an inheritance).
In the case of a transfer for a valuable consideration, by assignment or otherwise, of a life insurance contract or any interest therein, the amount excluded from gross income by [the beneficiary of death proceeds under a life insurance contract] shall not exceed an amount equal to the sum of the actual value of such consideration and the premiums and other amounts subsequently paid by the transferee.
Valuable consideration also does not include the consideration paid to a donor of human eggs or sperm by a fertilization clinic or sperm bank, as well as any other consideration expressly allowed by federal law.
49) Within the meaning of the Act, valuable consideration includes "reasonable payment for the removal, processing, disposal, preservation, quality control, storage, transportation, or implantation of a part.
Note that time periods are now triggered by the receipt of non-refundable non-monetary valuable consideration from a prospective franchisee.
English law contains a long enshrined principle of privity of contract, namely the principle that a person who is not a party to an executed contract or has passed valuable consideration for it cannot benefit from that.
Reflecting a large number of supporting court cases, Revenue Canada takes the position that a gift is a voluntary transfer of property without valuable consideration.
Klein traces Shaffer's use of games through all three plays, and although his identification of the game in Yonadab lacks the clarity of his references to the other two plays, the essay provides a valuable consideration of these works.
The IRS ruled that the transfer of the policies to the trust did not constitute a transfer for valuable consideration within the meaning of section 101(a)(2).
The covenant must be supported by valuable consideration.