Consideration, in Law, the thing given, or done, or abstained from by agreement with another, and in view of that other doing, giving, or abstaining from something. An obligation incurred without consideration is, in England, termed voluntary, in Scotland gratuitous; if for consideration, it is so styled in England, but in Scotland it is called onerous. Considerations are divided in England into good and valuable, the former being affection for a near relative, the latter a pecuniary or other tangible benefit, or marriage. But 'good' as distinguished from 'valuable' consideration has now no legal effect in England. There is no corresponding division in Scotland, but the fulfilment of a natural obligation, such as that of alimony, is often recognised as supporting a transaction which would otherwise be inoperative against creditors. In Scotland, however, there is, as a general rule, no need for consideration to make a contract valid, while in England no action lies for breach of a contract not under seal, unless there has been valuable consideration, and the courts never enforce specific performance of a gratuitous contract, even though it is under seal. This doctrine does not mean that consideration must be adequate in view of the court. But the excess of consideration is an important fact in the setting aside of obligation obtained by means of pressure or undue influence. The English doctrine of unconscionable bargains is not, however, recognised in Scotland. Where the consideration for an obligation totally fails, an action of repetition lies.
There are some circumstances which, in both countries, warrant the setting aside of obligations without consideration, whether made by deed or not. In England they are void as against bona-fide purchasers, and void as against creditors where the grantor is indebted to such creditors at the time to the extent of insolvency. A similar rule to the latter, with respect to creditors generally, is established in Scotland by the Act 1696, chap. 5, and by 1621, chap. 18, without proof of insolvency when the deed is granted to a near relation, or a person in a confidential situation. As regards sales of land in Scotland, these are made on the faith of the records, and the first registered conveyance prevails. And all obligations for which the consideration is illegal or immoral are in both countries void.
In the United States, consideration in law has the same general signification as in England, and is subject to the same general divisions, 'good' or 'meritorious' and 'valuable.' A consideration is an essential element enforceable in law, and must be actual and expressed, or the instrument must be such as to bear evidence of a consideration. By common-law statutes re-enacted in the United States, negotiable paper and sealed instruments are declared to bear this evidence; but in some states by usage, and in others by statute, courts of equity are empowered to set aside these instruments for want of, or a failure of, a valid and legal consideration upon the ground that the instrument was executed upon a promise or stipulation not fulfilled.