Have you ever wondered what “consideration” means when people talk about it in Oklahoma contract law?
Attorneys occasionally throw around big words that end up sounding like gibberish to everyone else. I don’t think most of us do it intentionally it’s just that we are immersed in legal staff and a lot of times don’t and stopped to think how it’s can the sound of people who don’t spend all day working on legal stuff.
One word that is used quite a bit is consideration. Consideration is one of the elements of a binding legal contract in the state of Oklahoma. But what does it mean in plain English terms and why is it important?
The Legal Definition of Consideration
Let’s start with the formal legal definition from Oklahoma law:
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.
The Simple Definition
In simple terms, consideration is anything you give to the other person in the contract in exchange for what they give you. Sometimes its money, sometimes it a promise to do something, sometimes it a promise to not do something.
Consider this example:
I make an agreement with my next-door neighbor in which I agree to mow his lawn every month for one year and he agrees to pay me $45.00 each time I mow it. The consideration I am giving to my neighbor is my promise to mow each month. The consideration my neighbor is giving to me is the promise to pay me when I mow.
Key points to remember about consideration
Finally, a couple of things to remember about consideration:
- Consideration must be something new or different above what a person was already obligated to do. For example, I cannot give someone as consideration in a contract my promise to deliver them a product if I am already obligated to deliver the product.
- Courts are not typically concerned with the amount or type of consideration. Courts are concerned with whether there is any consideration. That is, a very small amount of money or a very small promise could be sufficient consideration to create a binding contract.