What Is Valid Consideration in Contract Law


Valid consideration is a crucial component of contract law, and it refers to the benefits or promises that each party provides to the other in exchange for entering into a contract. Simply put, valid consideration is the exchange of something of value.

Under contract law, consideration must be both legally sufficient and adequate. This means that consideration must be something that has value in the eyes of the law and must be sufficient to support a contractual agreement. Consideration can take many forms, including money, goods, services, or even a promise to perform an action.

Legal Sufficiency

To be legally sufficient, consideration must be something that the law recognizes as having value. This usually includes money, property, or services. For example, if you offer to pay $100 for a sewing machine, your offer would be legally sufficient because it involves the exchange of money for a product.


Adequacy refers to whether the consideration provided is reasonable in relation to the value of what is being exchanged. While courts generally do not consider the adequacy of consideration, parties may choose to do so themselves. For example, if you agree to sell a car worth $5,000 for $20, the consideration would not be adequate.

Past Consideration

Past consideration is not considered valid under contract law. This means that a promise made in exchange for something that has already been performed is not enforceable. For example, if you promise to pay your friend $100 for helping you move last month, your promise is not legally binding because the consideration was provided before the promise was made.

Mutual Consideration

For a contract to be valid, both parties must provide consideration. This means that each party must offer something of value to the other. For example, if you hire a contractor to build a deck, you offer to pay money in exchange for the contractor`s services.

In conclusion, valid consideration is a critical aspect of contract law. It ensures that both parties exchange something of value and that the contract is legally binding. For a contract to be enforceable, the consideration provided must be legally sufficient, adequate, and mutual.