Legal Definitions - future consideration

Future consideration refers to a promise made by one party in a contract to provide something of value to the other party at a later date. In contract law, for an agreement to be legally binding, each party must provide "consideration"—meaning something of value exchanged. When this value is not delivered immediately but is instead a commitment to perform an action, provide a service, or transfer an item in the future, that promise itself serves as the consideration. It's the commitment to a future act or forbearance that makes the agreement enforceable.

Here are some examples illustrating future consideration:

• Scenario: A small business owner contracts with a web designer to create a new website. The contract states that the designer will deliver the completed website in three months, and the business owner will pay the full fee upon successful launch of the site.

  How it illustrates future consideration: Here, the web designer's promise to build and deliver the website in three months is the future consideration provided by the designer. Similarly, the business owner's promise to pay the fee after the launch is the future consideration provided by the owner. Both parties are promising future actions as the "something of value" that makes the contract binding.

• Scenario: A farmer agrees to sell 500 bushels of corn to a food distributor. The agreement specifies that the corn will be harvested and delivered in four months, and the distributor will make payment upon delivery.

  How it illustrates future consideration: The farmer's commitment to harvest and deliver the corn at a future date (in four months) constitutes future consideration. The distributor's corresponding promise to pay for the corn upon its future delivery is also future consideration. The exchange of these promises for future actions forms the basis of their legally enforceable contract.

• Scenario: An individual signs up for a year-long gym membership. They agree to pay a monthly fee for the next twelve months. In return, the gym promises to provide access to its facilities and classes for that entire year.

  How it illustrates future consideration: The individual's promise to make twelve separate monthly payments over the course of a year represents future consideration. The gym's promise to grant access to its services for the duration of that year is also future consideration. The agreement is binding because both parties have committed to providing value in the future.