An Introduction to Consideration

AuthorFranklin G. Snyder, Mark Edwin Burge
An Introduction to
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 definitionthe 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 lawand for millennia
before thatenforceable 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
cumbersomenot everybody has a signet ring and a candle handyand 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 outand
whether it was a good ideais 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.

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