Legal Definitions - for value received

The phrase "for value received" is a common legal expression found in various documents, such as contracts, promissory notes, or deeds. It serves as a formal acknowledgment that something of legal value – known as "consideration" – has been exchanged between the parties involved in an agreement.

While the phrase itself doesn't specify what that value was (e.g., a specific amount of money, goods, or services), its inclusion confirms that such an exchange occurred. This exchange of value is a fundamental requirement for an agreement to be legally binding and enforceable. Essentially, "for value received" is a declaration that the agreement is supported by a valid exchange, preventing one party from later claiming they received nothing in return.

• Example 1: Promissory Note for a Loan

  Imagine a small business owner, Sarah, needs a short-term loan from a friend, Mark, to cover unexpected expenses. Mark agrees to lend her $5,000. Sarah drafts a promissory note, a written promise to repay the loan, and includes the phrase "For value received, I, Sarah Chen, promise to pay Mark Johnson the sum of $5,000..."

  How it illustrates the term: In this scenario, "for value received" confirms that Mark actually provided the $5,000 loan to Sarah. It acknowledges the "value" (the money) that Sarah received, making her promise to repay it a legally binding obligation.

• Example 2: Contract for Consulting Services

  A marketing consultant, David, enters into an agreement with a startup company, InnovateTech, to develop their new brand strategy. The contract states, "InnovateTech agrees to pay David Miller $10,000 for value received, upon completion of the brand strategy project."

  How it illustrates the term: Here, "for value received" signifies that InnovateTech will receive the completed brand strategy from David. The phrase acknowledges that David's consulting services, once rendered, constitute the "value" that InnovateTech is paying for, thereby solidifying the company's obligation to compensate him.

• Example 3: Transfer of a Business Asset

  An artist, Elena, decides to sell her specialized pottery kiln to another artist, Ricardo. They draw up a simple bill of sale. The document reads, "For value received, Elena Rodriguez hereby transfers ownership of one XYZ Model 3000 Pottery Kiln to Ricardo Sanchez."

  How it illustrates the term: In this context, "for value received" indicates that Ricardo has provided something of value (likely money, though the specific amount isn't stated in this phrase) to Elena in exchange for the kiln. It legally confirms that the transfer of ownership is valid because a reciprocal exchange of value has taken place.