UNIVERSITY OF MIAMI
SCHOOL OF LAW
Contracts
PROFESSOR ROSEN
Consideration Considered
Holmes once wrote that consideration is "reciprocal conventional
inducement."
a. By "reciprocal," Holmes was referring to the requirement that each party
must do or give something in return for the other party's act or promise.
In Ricketts v. Scothorn, defendant argued that plaintiff never
promised to not work, so there was no consideration.
In other cases, the court finds that one party never bound themselves
to do any specific thing (they made an illusory promise), so there is no
consideration. A promise of a gift is not enforceable because reciprocation is not
required.
b. By "conventional," Holmes is acknowledging that the law does not
recognize all reciprocal inducements as "consideration," only certain ones.
In Kirksey v. Kirksey, neither love and affection nor pain and
inconvenience are regarded as consideration. Other cases refuse to enforce
meretricious contracts. But courts do not judge the adequacy of consideration
(except when they do). There is no requirement of benefit or detriment; one
only must do what one has the legal right not to do (Hamer v. Sideway).
Promises count as consideration only if the performance of the
promise counts as consideration.
c. By "inducement," Holmes is referring to the requirement that the party
making the promise must have been "induced" to do so by the act or promise of the
other. "Inducement" is not to be confused with intent or motive. By "inducement,"
Holmes is referring to the test that for something to be consideration, it must be treated
by the parties as consideration.
In Williston's tramp hypothetical, the coat is not given in exchange for
the tramp walking to the store.
Cases that hold that "past consideration is no consideration" exemplify
this requirement, in that the promise to pay for what has been done already does not
induce the provision of the benefit. Similarly, the pre-existing duty rule exemplifies
this argument in that the performed duty was not legally induced by the offer of new
consideration.