An Introduction to Consideration

• Author: Franklin G. Snyder, Mark Edwin Burge
• Pages: 116-116

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116 CHAPTER III: CONSIDERATION

An Introduction to

CONSIDERATION

The definition of “contract,” according to section 1 of the Restatement (Second)

of Contracts, is “a promise or a set of promises for the breach of which the law gives

a remedy, or the performance of which the law in some way recognizes as a duty.” To

a certain extent this is a circular definition—the law enforces a promise if it a

“contract,” and it is a “contract” if the law enforces it. But the important thing to note

is that enforceable contracts are a subset of all promises, and thus it becomes critical

to be able to distinguish those that are legally enforceable from those that are not.

Drawing Lines for Enforcement. At early common law—and for millennia

before that—enforceable promises were usually distinguished by their use of specific

rituals or forms. There are countless ritual forms used in various places and times,

ranging from the relatively simple (holding hands over a sacred stone) to the

extremely elaborate (preparing a scroll, killing a sacrificial animal, smearing its blood

on the parties and the document, and then burying the scroll). Obviously, as

commerce grew, contracting became common, and people from one culture began to

trade with others, these sorts of elaborate rituals became cumbersome. Thus,

commercial cultures tended to develop relatively simple forms that were used to

distinguish enforceable from unenforceable promises.

The English Approach to Formality. In England, the sign of an enforceable

agreement ultimately took the form of a wax seal impressed with a signet. Sealed

contracts were enforceable simply because they were correctly sealed. Even seals are

cumbersome—not everybody has a signet ring and a candle handy—and so over time

the use of special formalities came to be displaced by a different approach. The

common law courts, who by definition were making things up as they went along out

of existing custom and practice, began to focus less on the form that the agreement

took, but rather on the kind of agreement it was. By the 19th century, courts had

clearly swung around to the position that a promise was enforceable if it was

supported by consideration. Exactly how and why this change came out—and

whether it was a good idea—is the subject of some discussion among contract law

scholars, but by the turn of the 20th century it was clear that in American law a

promise generally had to be supported by consideration to be enforceable as a

contract. Whether that is still the case is something you will discover from the

materials that follow.

A note of caution. If you think “a promise that involves consideration” means

“a promise that you thought seriously about,” you are wrong. “Consideration” is one

of those legal terms of art that means something very different from what it means

in ordinary usage. Stay tuned.