No consideration, no contract - is this accurate?

[sweeteviljesus]

Is it true that you cannot have a contract to provide a good or service for free? Doesn’t there have to be an exchange (at least a dollar) for there to be a valid contract?

Thanks,
Rob

[barbitu8]

A valid contract must have consideration: a quid pro quo. Property conveyed to a relative. for example, as a gift, will say for one dollar and other good and valuable consideration. No law prevents you from providing goods or services as a gift, but that is not a contract.

[allotrope]

http://en.wikipedia.org/wiki/Consideration_under_American_law#Exceptions_to_the_Consideration_Requirement

Exceptions to the Consideration Requirement

Modern contract theory has also permitted remedies on alternative theories such as promissory estoppel. Also, modifications to existing lease agreements (as opposed to the creation of a new lease agreement) do not require consideration,[1] nor do modifications to existing sale contracts[2] Furthermore a promise to perform a moral obligation—the classic example is of a promise to support a person injured while coming to the rescue of the promisor—is enforceable provided the promissee was harmed in conferring a benefit on the promisor and the promise is not disproportionate to the benefit. The promise to pay a debt discharged by bankruptcy, the promise to perform a conditional responsibility despite the nonoccurrence of the condition, and the promise to perform on a voidable contract form a category of moral obligations that can bind in the absence of consideration.

[Fuzzy_Dunlop]

@sweeteviljesus

Is it true that you cannot have a contract to provide a good or service for free? Doesn’t there have to be an exchange (at least a dollar) for there to be a valid contract?

Thanks,
Rob

Both parties need to suffer some legal detriment, meaning they need to agree to do something they otherwise did not need to do or agree to refrain from doing something they were otherwise free to do. It doesn’t need to be monetary.

[Cliffy]

Contracts are covenants – mutual promises. If there’s no consideration, then it’s not a covenant; it’s a promise to give a gift. The courts don’t enforce promises to give a gift.

Now once the gift is actually given, it’s the property of the giftee, and the original owner cannot take it back. But if you just promise to give someone something gratis, they can’t make you do it as a matter of law if you change your mind before you hand it over.

–Cliffy

[Cliffy]

Note also that, as the OP anticipates, consideration can be nominal. In general, courts won’t try to determine if the promises are of equivalent value. If the parties made the deal, then obviously they’ve already determined that the promises are of equivalent value. (There are exceptions, as always, such as when the parties are not on a level playing field.)

–Cliffy

[UltraVires]

All of the above are correct, but courts will bend over backwards like the US Olympic Gymnastics Team to find some type of consideration…

[allotrope]

Something that should be pointed out is that some of the remedies for a breach of contract where consideration is an issue are equitable rather than legal and therefore do not strictly fall under the rubric of contract law. Of course having said that, I think the distinction between courts of law and courts of equity has been pretty thoroughly erased by now. Even so, it is still an important point to keep in mind when arguing specific issues.

[Tabby_Cat]

I’m not sure if it follows in US law, but a deed does not require consideration. You can enforce a deed even though there was no consideration.