Reading material:
Please read the following in your Business Law text:
Bevans, N. (2006). Business law: A hands-on approach. Clifton Park, NY: Delmar Cengage Learning
Chapter 4 pages 71–85

1: What is Consideration?

Consideration is the right, interest, or benefit of one party. It can also be defined as something given in exchange for a promise. Consideration, in essence, is something that one party values and is willing to give to another party for a return promise.

2. Types of Consideration

Consideration comes in many forms. The following are a few examples:

A benefit, such as having the benefit of going to the front of the cafeteria line.
Money.
A physical object, such as a valued teddy bear.
Consideration is important because it demonstrates a party’s intent to contract. A gratuitous promise is a one-party promise to do, or give, something to another party. These are unenforceable.

For example:

Suppose that I promise to give Lori my prized paperclip collection. If I do not deliver the paperclip collection to her, she has no legal recourse to enforce the promise. This is because Lori did not provide a promise in return. If she had, then she would have provided consideration, and that would have formed a legal contract.

3. Proving Consideration

Proving consideration is generally not at issue in litigation. This is because contracts are written nearly all of the time. Oral promises, which are enforceable, must prove consideration when there is no writing. This is accomplished by testimony of the parties and witnesses to the contract.

4. Insufficient Consideration

Courts rarely evaluate whether the consideration tendered, by any party to a contract, is insufficient. This is because courts realize that they cannot determine the value of intangible consideration as it applies to an individual. “They do not wish to put themselves in the position of acting as the final arbiters of value” (Bevans, 2006, p. 78).

For example:

Steve has the benefit of always being allowed to the move to the front of the cafeteria line. He trades this benefit in return for Fadi’s television. The court views the bilateral consideration tendered as “sufficient” because each party bargained-for the promise they received in exchange. A court cannot possibly determine how valuable Steve’s benefit is to him or to Fadi. The value of such is to be determined by the parties in the bargaining phase of contract formation.

Assignment:
What is Promissory Estoppel? Define one of the following: Waiver, Accord and Satisfaction, or Contracts for an Illegal Purpose. Create a fact pattern illustrating one of the concepts defined above.