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One of the other important elements of contract law, which is difficult for the non-lawyer to
understand, is the requirement of consideration.
One 1875 English case, Currie v. Misa, offered a definition of "consideration" which is still
used:
".. some right, interest, profit or benefit accruing to the one party or
some forbearance, detriment, loss or responsibility given, suffered or
undertaken by the other."
As such, a contract differs from a gift.
This also explains why you sometimes hear of very expensive objects sold for $1; which is
done to ensure that what is essentially a gift, comes with the legal protection of contract law.
Under contract law, there is no contract if there is no consideration.
But consideration does not necessarily have to be quantified or quantifiable in monetary
terms. Any discernible detriment to one of the parties could be that party's consideration.
In one case, Hubbs v. Black, 1918, agreeing not to take a certain plot in a cemetery was
considered to be sufficient consideration. Giving a right to sue on a "bona fide" claim has
been deemed to be adequate consideration. Also, the courts don't really care about the
adequacy of the consideration. This is the business of the parties and not a matter for judicial
interference.
Some other notes on consideration:
• The consideration must be reciprocal, each party offering consideration.
• Motive is different from consideration. Your motive for contracting is your personal
reason for contracting. It may not coincide with the consideration you are giving, or
receiving, as part of the contract.
• If a consideration is already "spent" in a prior contract, a new contract using that same
consideration would be valid. In the words of one law professor (The Law of Contract
in Canada, G. Fridman): "where a contractual duty already exists, it may be
possible...to vary the original agreement without necessarily establishing a whole new
contract with fresh consideration on both sides." In fact, refreshing a commitment to
do something for a third party is consideration under common law.
• The consideration cannot be something or some act which is illegal, immoral or
contrary to public policy (see also the section on Restraint of Trade contracts ). If a
certain act is punishable by some law, then it is "illegal". An example would be a work
contract to an unlicensed electrician.