Doctrine of Consideration

Consideration is a foundational requirement of contract formation in English common law: a promise is enforceable as a simple contract only if something of value passes in exchange for it, a rule that distinguishes ordinary contracts from contracts executed by deed, which need no consideration at all. Valid consideration must be real rather than illusory, must move from the person to whom the promise is made, need only be sufficient rather than adequate in the eyes of the market, must be given as a whole rather than partially, and cannot consist of something already done in the past. Courts applying the doctrine generally refuse to ask whether a bargain was a fair one, only whether consideration in this technical sense exists at all. The requirement is a defining feature of English, American and other Commonwealth common law systems; civil law systems descended from Roman law, including Germany and Scotland, impose no such requirement, treating an exchange of promises or a simple meeting of the parties' wills as sufficient to form a binding contract.