Legal Definitions - legally sufficient consideration

Legally sufficient consideration refers to a fundamental requirement for a contract to be valid and enforceable. It means that each party involved in an agreement must provide something of legal value to the other party, as part of a mutual exchange or bargain. This "something of legal value" can take various forms: it might be a promise to perform an action, a promise to refrain from doing something (known as forbearance), or an actual act.

For consideration to be legally sufficient, it must be a genuine part of a mutual exchange. This means it cannot be a mere gift, something one is already legally obligated to do (a pre-existing duty), or something that was done in the past without the expectation of a future exchange (past consideration). The law generally does not require the value exchanged to be equal or fair in a monetary sense; rather, it requires that each party genuinely gives up something of recognized legal worth in exchange for the other's promise or action.

Here are some examples illustrating legally sufficient consideration:

• Example 1: Service for Payment
  A freelance graphic designer agrees to create a new logo for a startup company, and in return, the startup promises to pay the designer $1,500 upon completion.
  How it illustrates the term: The graphic designer's promise to create the logo is legally sufficient consideration for the startup's promise to pay $1,500. Conversely, the startup's promise of payment is legally sufficient consideration for the designer's work. Each party is providing something of legal value (the designer's skill and time, the company's money) as part of a bargained-for exchange, making their agreement a valid contract.

• Example 2: Forbearance of a Legal Right
  A property owner has the legal right to build a small shed on their property line. Their neighbor, who wants to preserve their garden view, offers the property owner $500 if they promise not to build the shed. The property owner agrees.
  How it illustrates the term: The property owner's promise to refrain from building the shed (an act they legally have the right to do) constitutes legally sufficient consideration for the neighbor's $500 payment. The property owner is giving up a legal right in exchange for the money, demonstrating a genuine mutual exchange of value.

• Example 3: Contract Modification with New Duties
  A construction company is contracted to build a deck by August 1st. Halfway through the project, the homeowner asks if the deck can be completed by July 15th instead, offering an additional $750 for the expedited timeline. The construction company agrees.
  How it illustrates the term: The construction company's new promise to complete the deck by July 15th (a date earlier than their original contractual obligation) is legally sufficient consideration for the additional $750. This new promise represents a new duty or burden beyond what was originally agreed upon, thus providing fresh legal value to support the homeowner's promise of extra payment and making the contract modification enforceable.