Any benefit conferred, or agreed to be conferred, upon the promisor, by any other person, to which the promisor is not lawfully entitled, or any prejudice suffered, or agreed to be suffered, by such person, other than such as he is at the time of consent lawfully bound to suffer, as an inducement to the promisor, is a good consideration for a promise.
Nature of a ContractConsideration
Section § 1605
This section explains that if someone makes a promise and, in return, gets something they weren't already entitled to, or if the other party agrees to suffer some kind of loss they weren't bound to accept, then that is a valid reason, or 'consideration', for making the promise. It's basically saying that a deal is legit if there is a real exchange of benefits or burdens.
promisor benefit conferred inducement
Section § 1606
This law says that if someone already has a legal duty to do something, or if they feel a moral obligation because they've received a benefit or caused a loss to someone else, that can count as a valid reason for them to make a promise. However, the promise is only valid as long as it matches the original obligation and doesn't go beyond it.
An existing legal obligation resting upon the promisor, or a moral obligation originating in some benefit conferred upon the promisor, or prejudice suffered by the promisee, is also a good consideration for a promise, to an extent corresponding with the extent of the obligation, but no further or otherwise.
legal obligation moral obligation promisor
Section § 1607
This law states that the value or reason for making a contract (called 'consideration') has to be legal. For more details on what's considered legal, see Section 1667.
The consideration of a contract must be lawful within the meaning of Section 1667.
contract consideration legal consideration lawful contracts
Section § 1608
If any part of the reason you're making a contract is illegal, then the whole contract can't be enforced. Similarly, if you're giving or promising illegal things as part of an agreement, then that agreement can't stand either.
If any part of a single consideration for one or more objects, or of several considerations for a single object, is unlawful, the entire contract is void.
illegal consideration contract void enforcement
Section § 1609
This section basically says that consideration, which is what you give or promise in a contract, can either be something already done (executed) or something that will be done in the future (executory). If it's the latter, it must follow certain rules in another part of the law.
A consideration may be executed or executory, in whole or in part. In so far as it is executory it is subject to the provisions of Chapter IV of this Title.
consideration executed consideration executory consideration
Section § 1610
This law explains that when something of value (consideration) will be provided in the future as part of a contract, it's okay if the exact amount isn't specified in the contract. Instead, how it will be determined can be left to a third party's decision or set by a specific standard mentioned in the agreement.
When a consideration is executory, it is not indispensable that the contract should specify its amount or the means of ascertaining it. It may be left to the decision of a third person, or regulated by any specified standard.
consideration executory contract
Section § 1611
This law says that if a contract doesn't specify how much a party should be paid or how to figure that out, and it leaves that decision up to one of the parties involved, the payment should equal the reasonable value of what's being exchanged or provided.
When a contract does not determine the amount of the consideration, nor the method by which it is to be ascertained, or when it leaves the amount thereof to the discretion of an interested party, the consideration must be so much money as the object of the contract is reasonably worth.
contract consideration ascertained
Section § 1612
If a contract specifies a way to determine its value that cannot actually be carried out, the whole contract is invalid. However, this rule doesn’t apply to situations described in sections 1729 and 1730 of this code.
Where a contract provides an exclusive method by which its consideration is to be ascertained, which method is on its face impossible of execution, the entire contract is void; but this section shall not apply to the cases provided for in sections 1729 and 1730 of this code.
contract consideration exclusive method impossible execution
Section § 1613
If a contract specifies a unique way to determine what each party gets, and that way is not doable, then just that part of the contract is invalid. However, this rule doesn't apply to specific situations covered in other sections, 1729 and 1730.
Where a contract provides an exclusive method by which its consideration is to be ascertained, which method appears possible on its face, but in fact is, or becomes, impossible of execution, such provision only is void; but this section shall not apply to the cases provided for in sections 1729 and 1730 of this code.
contract consideration exclusive method impossible execution
Section § 1614
In simple terms, this law says that if there's a written agreement, it's usually assumed that something of value was exchanged, unless proven otherwise.
A written instrument is presumptive evidence of a consideration.
written agreement presumptive evidence consideration
Section § 1615
If someone wants to show that a contract or agreement is not valid because there wasn't enough value exchanged, it's their responsibility to prove it.
The burden of showing a want of consideration sufficient to support an instrument lies with the party seeking to invalidate or avoid it.
contract validity want of consideration sufficient consideration
