Show Consideration for the Platypus (Contracts, Part 3)

We’ve already discussed two of the basic requirements for a contract: a valid offer and acceptance. Today we address consideration – a legal term which has more to do with showing the money than showing concern.

In contract law, “consideration” means a thing or act of value which provides the basis for people entering into a contract.

In English, “consideration” means how many Oreos you’re going to give me for this platypus. (You want this platypus. You know you do.)

As long as a contract contains some form of consideration, courts rarely evaluate the amount or sufficiency. One court even stated that “a mere peppercorn will do.”

In the real world, this means be careful – the contract should state exactly what amount of money or which services each party will give to the other, the timeline or dates upon which payment will take place, and the consequences of failure to perform. A promise to pay extra, or “go the extra mile” means nothing if the contract doesn’t actually say that it’s required.

Consideration doesn’t have to be money. Services are consideration too. In our ongoing hypothetical, the consideration is the million dollars you’re going to pay me for this (fictitious) platypus. (The fictitious ones are always more expensive.)

In an old court case, an uncle offered to pay his nephew $1,000 if the nephew refrained from smoking, drinking or “consorting with loose women” during his college years. (The case dates before 1900, so $1,000 was a hefty sum.) The offer was verbal, but documented in subsequent letters between the two men. The nephew fulfilled his part of the deal. When the uncle refused to pay, a court held that the nephew’s decision to refrain from otherwise legal conduct was valid consideration and the uncle was legally obligated to pay.

When the uncle claimed that “not doing things” was not valid consideration, the court replied that the uncle could have asked for anything he wanted in return for his $1,000. What he asked for – and received – was his decision, and he had received what he asked for.

A peppercorn will do.

The moral of our story is fairly simple: be careful what you wish for in return for your platypus. Make sure you ask enough before you sign on the dotted line.

Submitted for your consideration.

Questions? Feel free to hop into the comments and ask. I’ll be glad to answer if I can!