Contract Law Basics in Florida: What is Consideration?

A contract is legally binding. It is formed when there is an offer, an acceptance, and, importantly, consideration by both parties. Without consideration, there is no enforceable contract in Florida. Here, our West Palm Beach business litigation attorney explains what consideration is, why it is important, and how it affects contract formation in Florida.

Consideration: Defined 

The Legal Information Institute defines consideration as a “promise, performance, or forbearance bargained by a promisor in exchange for their promise.” In other words, consideration is the agreement to give up something in exchange for receiving something. It is an essential element for forming a legally binding contract.

Consideration is a Required Element of a Contract in Florida

 You cannot form a valid contract in Florida without consideration. Both parties must give “consideration” for a contract to be formed. If one party does not receive consideration as part of the agreement, only a mere promise has been made. Promises are not enforceable in Florida. Without the exchange of something of value between parties, there is no contract.

Notably, the term “consideration” is broadly defined under Florida law. The mutual exchange could be monetary, a service, a promise, or refraining from an action. To be clear, the value exchanged does not need to be equal or fair. However, it must be legally sufficient and clearly established for the contract to be upheld in court.

 Understanding Consideration Through Examples

 To best understand how consideration works in contract law in Florida, it is useful to review some hypothetical examples. Here are examples of where consideration does (or does not) exist:

• Consideration: A homeowner in West Palm Beach agrees to pay a landscaper $500 to redesign their backyard. The landscaper’s promise to perform the landscaping (a service) is the consideration they provide. In turn, the homeowner’s promise to pay $500 (money) is their consideration. The mutual promise of services for payment ensures that both parties have a legally enforceable obligation. There is sufficient consideration to form a contract.
• No Consideration: A friend of a homeowner in Jupiter agrees to stop by this weekend and help with landscaping yard work for a few hours. The friend is not going to get paid, but they say that they are more than happy to do a favor. However, when the weekend comes, they simply do not show up. That friend failed to provide the promised service. However, since the homeowner is not paying them—meaning they did provide any form of consideration—no contract has been formed under Florida law. There is no viable legal claim against another party who fails to live up to a mere promise.

 Contact Our Palm Beach County Business Lawyer Today

At Pike & Lustig, LLP, our Florida contract lawyers are standing by, ready to protect your rights and your interests. If you have any questions about consideration and contracts, please do not hesitate to contact us today. With a law office in West Palm Beach, we serve communities throughout Palm Beach County, including in Jupiter, Boca Raton, Wellington, and Palm Beach Gardens.