What Is Lawful Consideration?

Juliet D'cruz

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What Is Lawful Consideration

Are you curious to know what is lawful consideration? You have come to the right place as I am going to tell you everything about lawful consideration in a very simple explanation. Without further discussion let’s begin to know what is lawful consideration?

Contracts are the foundation of legal agreements, governing various transactions and relationships in both personal and business domains. Central to the validity and enforceability of a contract is the concept of lawful consideration. In this blog post, we will explore what lawful consideration is, its importance in contract law, and how it ensures fairness and legitimacy in contractual relationships.

What Is Lawful Consideration?

Lawful consideration, often simply referred to as consideration, is a fundamental element of a valid contract. It refers to something of value that is exchanged between the parties involved in a contract. Consideration can take the form of money, goods, services, promises, or anything else that has legal value and is agreed upon by the parties.

Importance Of Lawful Consideration

  1. Requirement for Contract Formation: In contract law, a valid contract must have mutual consideration. Both parties must provide something of value to the other, establishing a mutual obligation. This requirement ensures that contracts are not based on gratuitous promises or one-sided arrangements.
  2. Demonstrates Intention and Assent: Lawful consideration is an indicator of the parties’ intention to be bound by the terms of the contract. By exchanging consideration, the parties demonstrate their agreement and assent to the contract’s terms, indicating a serious intention to be legally bound.
  3. Basis for Enforceability: Lawful consideration is the basis for the enforceability of a contract. If one party fails to fulfill their obligations under the contract, the other party can seek legal remedies because the consideration provided serves as a basis for the courts to intervene and uphold the contract.

Requirements For Lawful Consideration

For consideration to be lawful and enforceable, it must meet the following criteria:

  1. Legally Sufficient: The consideration exchanged must have legal value. It can be in the form of money, property, goods, services, promises, or any other legally recognized form of consideration.
  2. Bargained-for Exchange: The consideration must be the result of a bargained-for exchange between the parties. This means that each party must provide something of value in return for the consideration received.
  3. Adequacy of Consideration: The law generally does not require the consideration to be of equal value between the parties. As long as there is a bargained-for exchange, the adequacy of consideration is not scrutinized, unless there is evidence of fraud, duress, or unconscionability.

Examples Of Lawful Consideration

  1. Payment for Goods or Services: In a sales contract, the buyer provides monetary consideration in exchange for the seller providing goods or services.
  2. Promises: Consideration can be in the form of promises exchanged between the parties. For example, in an employment contract, the employer promises to provide a salary and benefits, while the employee promises to perform specific duties.
  3. Mutual Exchange: Consideration can also be the mutual exchange of obligations. In a lease agreement, the tenant provides rent payments in exchange for the landlord providing the right to occupy the property.


Lawful consideration is a fundamental concept in contract law, ensuring that agreements are based on mutual exchange and fairness. It establishes the validity and enforceability of contracts by demonstrating the parties’ intention and providing a basis for legal remedies in case of breach. Understanding the significance of lawful consideration allows individuals and businesses to enter into contracts with confidence, knowing that their rights and obligations are protected under the law.


What Is Lawful Consideration In Law?

(a) A agrees to sell his house to B for 10,000 rupees. Here Bs promise to pay the sum of 10,000 rupees is the consideration for As promise to sell the house, and As promise to sell the house is the consideration for Bs promise to pay the 10,000 rupees. These are lawful considerations.

What Is An Example Of A Lawful Consideration Case?

Example – A promises to work for B who runs both illegal and legal business for a sum of Rs. 4,000 per month and B agrees to pay this amount to A. The legal business can be separated from illegal business, the part of salary pertaining to legal business is lawful consideration.

What Is Lawful Consideration In Essentials Of Contract?

The consideration or object of an agreement is considered as lawful unless it is forbidden by any law, is of such a nature that if permitted it would violate the provisions of any law, is fraudulent, involves or implies injury to another person or property or the Court considered it as immoral, or opposed to public …

What Is Consideration In Law With Example?

Anything of value promised by one party to the other when making a contract can be treated as “consideration”: for example, if A contracts to buy a car from B for $5,000, A’s consideration is the promise of $5,000, and B’s consideration is the promise of the car.


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