Consideration

Consideration is a principle in English common law that requires one party to promise something of value in exchange for something of value from the other. It is necessary for simple contracts, but not for special contracts like those made by deed. Other common law jurisdictions have adopted this concept, and it is often listed as one of six or seven essential elements of a contract.

In the case of *Currie v Misa*, the court defined consideration as a "Right, Interest, Profit, Benefit, or Forbearance, Detriment, Loss, Responsibility." Typically, the thing of value is goods, money, or an act. Forbearance—such as an adult promising to stop smoking—is only enforceable if it involves giving up a legal right.

Any promise of value made by one party during a contract can serve as consideration. For instance, if A agrees to buy a car from B for $5,000, A’s consideration is the promise to pay $5,000, and B’s consideration is the promise to deliver the car. Consideration can be a good, a service, or an agreement to do or not do something. For a valid contract, the promised consideration must be worth something.

As an element or prerequisite, consideration is required in common law before a contract is binding. The doctrine is irrelevant in many other legal systems, though in commercial litigation, the link between a promise and a deed reflects the nature of contractual consideration. If no consideration exists, no contract is formed. However, even without a contract, recovery may be possible under doctrines like quantum meruit (a quasi-contract) or promissory estoppel.

Several legal rules govern consideration under English law. It cannot be illusory. It must move from the promisee but does not need to flow to the promisor. It must be sufficient but not necessarily adequate. It must be whole—part payment is not good consideration. It must not be past; past consideration is invalid. Moral consideration is not sufficient (except in contracts by deed, where "love and affection" is often cited as unnecessary consideration). Performing existing duties also does not count.

Under the Indian Contract Act of 1872, still in force in Pakistan, Bangladesh, and India, valid consideration must meet these criteria: it must move at the desire of the promisor; it may come from the promisee or any other person; it must be an act, abstinence, forbearance, or a returned promise; it may be past, present, or future; it must be real; it must be something the promisor is not already bound to do; and it need not be adequate. Consideration is invalid if it is forbidden by law, involves injury to a person or property, is regarded by courts as immoral, would defeat any law if permitted, is fraudulent, implies injury, is contrary to public policy, restrains legal proceedings, involves public offices or titles, involves involuntary labor, or includes a marriage or pecuniary inducement to marry. The main difference between English and Indian law is that English law prohibits past consideration, while Indian law allows it.

Systems based on Roman law, such as those in Germany and Scotland, do not require consideration. Some commentators consider it unnecessary and suggest replacing it with estoppel. Legislation, rather than judicial development, is often seen as the only way to remove this entrenched common law doctrine. As Lord Justice Denning said in 1947, "The doctrine of consideration is too firmly fixed to be overthrown by a side-wind."

The differing views on consideration in common law jurisdictions likely stem from 19th-century judges merging two legal threads. First, the consideration requirement was central to the action of assumpsit, which originated in medieval times and was the normal remedy for breach of a simple contract in England and Wales until 1884, when old forms of action were abolished. Second, the idea that agreement between parties is the essential legal and moral foundation of contract was promoted by the 18th-century French writer Pothier in his *Traite des Obligations*, widely read by English judges and jurists after its 1805 translation. This idea aligned with contemporary theories of will, especially John Stuart Mill’s views on free will, and was added to the traditional common law requirement for consideration in assumpsit.

Civil law systems take a different approach: an exchange of promises or a concurrence of wills alone is sufficient, rather than an exchange of valuable rights. If A promises to give B a book and B accepts without giving anything in return, B would have a legal right to the book, and A could not change their mind. In common law, however, the concept of *culpa in contrahendo*—a form of estoppel, an equitable doctrine—can create legal obligations.