Valuable Consideration Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of Valuable Consideration, written in plain English, along with examples of how it is used.
What is Valuable Consideration?
(n) For a valid agreement between two parties a consideration is required. It can be money, materials or performance quantifiable in money’s worth. Such consideration passed from one party to the other under an agreement enforceable by law is called as valuable consideration
History and Meaning of Valuable Consideration
Valuable consideration is a term used in contract law to refer to something of value that is promised or given in exchange for something else. This 'something of value' need not always be monetary or tangible; it can also be a promise to perform an act in the future, such as refraining from doing something. The concept of consideration has been a fundamental requirement for a contract to be enforceable under English common law, and it has since been adopted and incorporated into the legal systems of many other countries.
According to legal scholars, the term 'valuable consideration' originally emerged in English contract law during the 16th century. At that time, it was used to describe any act or item that was given by one party to another as an inducement to enter into a contract. Since then, the definition has been refined and expanded to include not only promises and actions, but also forbearances, or the act of refraining from doing something.
Examples of Valuable Consideration
In a lease agreement, the tenant agrees to pay a monthly rent in exchange for the right to use the property. The rent paid by the tenant is a form of valuable consideration.
An employer and employee enter into an employment contract. The employer agrees to pay the employee a salary and provide certain benefits, while the employee agrees to perform certain duties. The salary and benefits paid by the employer constitute valuable consideration.
A contractor agrees to provide construction services to a property owner for a fee. The fee paid by the property owner in exchange for the services rendered constitutes valuable consideration.
Legal Terms Similar to Valuable Consideration
Legal detriment - This is a term used to describe any act, forbearance, or promise that causes a party to suffer some form of harm, loss, or inconvenience.
Consideration in kind - This term refers to a form of consideration that is not monetary or tangible, but rather involves the exchange of services, goods, or intangible benefits.
Nominal consideration - This term describes a form of consideration that has virtually no value, such as a token payment of $1. Despite having little actual value, nominal consideration is still legally sufficient to create a binding contract between two parties.