Consideration has two components: it must be bargained for, and it must have legal value. "Bargained for" means the consideration was sought by the promisor in exchange for the promise, and it was given by the promisee in exchange for that promise. A benefit conferred before the promise was made — past consideration — generally does not satisfy this requirement.

Legal value means the consideration must be something the law recognizes as sufficient: a promise to do something, the actual doing of something, or a promise to refrain from doing something the party has a legal right to do (forbearance). Courts do not generally inquire into whether the exchange was economically fair — adequacy of consideration is not required. A promise to pay $1 for a $100,000 property can be valid consideration if it was genuinely bargained for.

A promise can be exchanged for another promise. Both parties can be bound by their promises before either performs. This is the basis of most bilateral contracts — I promise to pay you, you promise to deliver the goods, and we are both bound from the moment of agreement.

Past consideration — something already done before the promise was made — is not valid consideration for a new promise. If a party has already performed a service and the other party later promises to pay for it, that promise may not be enforceable as a contract because the performance was not given in exchange for the promise.

A pre-existing legal duty is generally not valid consideration. If a party is already legally obligated to do something — by a prior contract or by law — promising to do that same thing is not consideration for a new promise. This rule has exceptions, particularly in contract modification contexts.

Illusory promises — promises that do not actually commit the promisor to anything — are not valid consideration. A promise to perform "if I feel like it" or "at my sole discretion" may be illusory if it leaves the promisor entirely free to perform or not.

Modifying an existing contract generally requires new consideration under Florida common law. If one party agrees to do more than the original contract required, that additional obligation can serve as consideration for the other party's promise to pay more. But a promise to do only what the party was already obligated to do is generally not sufficient.

For contracts involving the sale of goods, Florida's version of UCC Article 2 (section 672.209) provides that a modification needs no consideration to be binding, as long as it is made in good faith.

Consideration questions arise most often in disputes about contract modifications, promises to pay for past services, and agreements that one party claims are not binding. Whether consideration exists is a legal question that depends on the specific facts and documents.

Before relying on a promise — or before agreeing to modify an existing contract — having an attorney review the arrangement can identify whether the exchange is legally sufficient and whether the modification will be enforceable.

Stewart Law reviews and drafts contracts for Florida businesses. See the contract review service or contact us to discuss a specific agreement.