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Money or other payment provided in exchange for an act or service that helps a business. Consideration may be cash in which case, it is more like a sale or payment-in-kind. For example, a person may receive a certain amount of equity in a business in exchange for giving or allowing the business to use the person's intellectual property.


Something of value provided by one party to another. For example, a person might provide an idea or labor to a business in exchange for shares of ownership.


  1. something of value which is offered by a party to a CONTRACT in exchange for something of value received. Consideration usually takes the form of a monetary payment in exchange for GOODS or SERVICES received, but could involve, for example, the direct exchange of one product for another (as in BARTER).
  2. the sum of money paid by an investor to purchase SHARES, STOCKS, etc., or the proceeds from selling such securities before allowing for stockbroker's commission and other transfer expenses.


An act or a promise given by one person in exchange for an act or a promise from the other.The values do not have to be equal, and it has been said that one may promise to give a barleycorn in exchange for the promise to deed a castle,and it will be sufficient.It is a common misperception that earnest money is the component that makes a real estate contract enforceable. In reality, the promise to buy, and the promise to sell, is sufficient consideration. Consideration is an essential element for contract enforcement.

Consideration substitutes. Sometimes the law will permit enforcement of a contract even though one side or the other did not give consideration, if there was an allowed consideration substitute. The most common one is detrimental reliance, in which one person promises to do a thing gratuitously and another worsens his or her position in reliance on that promise. Under ordinary circumstances this would be a mere promise to make a gift, and unenforceable. Because of the detrimental reliance, however, it may become an enforceable contract.

Adequate consideration. If this is required by law, the consideration must be reasonably close to the value of the thing promised or exchanged.

Good consideration. The consideration is based on natural duty and affection or a moral obligation, such as property sold for “love and affection.”

Consideration of support. It is not uncommon for elderly parents to transfer property to their children “in consideration of care and support.” In most states, such transfers are voidable if the care and support are not forthcoming.

References in periodicals archive ?
Here's a look at the five states with the strongest annuity consideration growth between 2015 and 2016.
The present study proposes that the leadership style of the follower, namely individualized consideration and passive/avoidant leadership tendencies, will predict course performance.
However, as discussed below, this guarantee comes at a price--lost flexibility in modifying the negotiated consideration.
If the portion of the consideration on the acquirer's books immediately preceding the acquisition date is not carried at fair value, a gain or loss will result from acquisition accounting.
First, he argued the treaty did not require the payor to receive such consideration from the recipient of the lottery payments and, in fact, that the lottery did receive it from the contributions of all lottery players.
6 of the Board's Regulation H, which implements Section 9(4) of the Act, provides that the factors given special consideration by the Board in acting on branch applications include the following:
Status: Referred to the Senate Committee on Finance for further consideration.
Production requirements and the size of the trucks or hoppers to be loaded are the primary considerations.
Another consideration is the "targeted compactability" of the molding sand that is prepared with predominately Western Bentonite bond.
To answer this question we must turn to the doctrine of consideration.