Legal Definitions - past consideration

In contract law, for a promise to be legally enforceable, it must be supported by something called "consideration." This means there must be a bargained-for exchange where each party gives up something of value or makes a promise in return for the other party's promise or action.

Past consideration refers to an act or benefit that was performed or provided by one party *before* a promise was made by the other party. Because the act or benefit was not given *in exchange for* the new promise, it generally cannot serve as valid consideration to make that new promise legally enforceable. The consideration must be part of the bargain at the time the promise is made, not something that happened in the past without a prior agreement.

• Example 1: A Neighborly Favor

  Imagine your neighbor, Alex, spent an entire Saturday helping you fix a broken fence, purely out of kindness and without any prior discussion of payment. A week later, feeling grateful, you tell Alex, "Because you helped me with the fence, I promise to pay you $300."

  How it illustrates past consideration: Alex's act of fixing the fence is past consideration. He performed the work *before* you made your promise to pay. His effort was not given in exchange for your subsequent promise of money; it was a voluntary act. Therefore, your promise to pay Alex $300 is generally not legally enforceable because it lacks valid consideration.

• Example 2: A Retroactive Bonus

  Sarah, an employee, consistently goes above and beyond her job duties for several months, successfully completing a challenging project ahead of schedule. Her manager, impressed by her dedication and results, tells her during her annual review, "Sarah, because of your outstanding work on that project, I'm going to give you a $1,500 bonus."

  How it illustrates past consideration: Sarah's outstanding work is past consideration. She performed the work over the past months without any prior agreement or promise of this specific bonus. The manager's promise of a bonus was made *after* Sarah's performance, not in exchange for it. As such, the promise of the bonus, if not part of an existing employment contract or policy, would typically not be legally binding as a new contract due to the lack of valid consideration.

• Example 3: Returning a Lost Item

  While walking in the park, David finds a valuable watch and, through some detective work, manages to return it to its rightful owner, Maria, without knowing there was a reward. Overjoyed and relieved, Maria exclaims, "Thank you so much for returning my watch! I promise to give you $100 for your honesty."

  How it illustrates past consideration: David's act of finding and returning the watch is past consideration. He performed this act of goodwill *before* Maria made any promise of a reward. Since his action wasn't done in exchange for Maria's subsequent promise, that promise is typically not legally binding due to a lack of valid consideration.