Consideration

Consideration is a fundamental requirement for an enforceable contract at common law. It consists of a bargained-for exchange in which each party either incurs a legal detriment (gives up something they have a right to) or receives a legal benefit. The exchange must be the product of genuine bargaining — gifts, moral obligations, and past consideration generally do not qualify.

Courts do not inquire into the adequacy of consideration — a peppercorn can support a promise. The focus is on whether consideration exists, not whether it is fair. Batsakis v. Demotsis established that even a grossly disproportionate exchange constitutes valid consideration.

The pre-existing duty rule provides that performing or promising to perform a duty one is already obligated to do is not valid consideration. Alaska Packers v. Domenico illustrates this: fishermen who refused to work unless paid more could not enforce the new promise because they were already contractually bound to fish. Exceptions exist for rescission and new agreement, unforeseen difficulties, and UCC § 2-209 (which eliminates the consideration requirement for modifications of goods contracts).

Promissory estoppel serves as a substitute for consideration when a promisor should reasonably expect reliance, the promisee actually relies, and enforcement is necessary to prevent injustice. The doctrine was powerfully applied in Hoffman v. Red Owl Stores and formalized in Restatement (Second) § 90.