Legal Definitions - other consideration

In contract law, consideration refers to the "something of value" that each party to a contract gives or promises to give in exchange for the other party's promise or action. It's the essential element that makes a promise legally binding rather than just a gift. It represents the bargained-for exchange between the parties.

The term other consideration simply clarifies that this "something of value" is not limited to money. While financial payment is a common form of consideration, contracts can be legally binding based on a wide variety of exchanges that do not involve currency. This can include promises to perform a service, promises to refrain from an action, goods, or other valuable benefits.

Here are some examples illustrating "other consideration":

• Example 1: Service for Service

  A web developer agrees to design a new website for a local restaurant. In return, the restaurant promises to provide free catering for the developer's next three corporate events. Here, the web design service and the catering service are the "other consideration."

  How it illustrates the term: Neither party exchanges money directly. Instead, the valuable services each party provides to the other constitute the consideration, making their agreement a legally enforceable contract.

• Example 2: Forbearance for a Promise

  A tenant discovers a significant defect in their rental unit that the landlord is legally obligated to fix. Instead of immediately filing a lawsuit for breach of contract, the tenant agrees to *forbear* (refrain from) taking legal action for 30 days. In exchange, the landlord promises to not only fix the defect but also to install a new appliance at no extra cost.

  How it illustrates the term: The tenant's promise to *not* sue (forbearance) is a valuable "other consideration." In return, the landlord's promise to fix the defect and install a new appliance is also valuable consideration. This agreement is legally binding without any direct monetary exchange for the resolution itself.

• Example 3: Goods for Goods

  An antique collector agrees to trade a rare 19th-century map with another collector in exchange for a vintage pocket watch of comparable value.

  How it illustrates the term: In this situation, the "other consideration" consists of the rare map and the vintage pocket watch. Both are tangible goods with recognized value, and their exchange forms the basis of a legally binding agreement, demonstrating that consideration isn't limited to currency.