Elements of an offer in contract law impact all parties involved. A performance is bargained for when the promisor seeks it in exchange for a promise that was already promised to him. The promisee will then give it, but only in exchange for the promise being fulfilled. The bargain requirement of this type of deal is used to distinguish between what are ordinary gifts and what are enforceable promises.

Can an Ordinary Gift Be Enforced?

When an ordinary gift is promised, it cannot be enforceable because it is not bargained for. Also, there are no legal ramifications if the promise is not fulfilled. For example, if John promises to buy Tom a car, and then does not hold true to this promise, there is no legal ramification involved. Now, if John promises to buy Tom a car in exchange for a promise on Tom's part, then legal ramification does exist, and the promise can be enforced.

It's important to note that a benefit is gained by the promisor when a performance of a bargain exists, which is what makes it a valid consideration. When performance of a precondition exists, however, this means there is no benefit for the promisor, and there is no consideration.

For example, Tom promises his sister that he will help raise her dog if she allows it to move in with him. After she pays for the expense of having the dog transported to Tom's house and remodels a bedroom in the home for the dog, Tom changes his mind. Tom is not legally bound to keep his promise. There was never any consideration given. The expenses incurred by his sister took place before Tom could even begin fulfilling his promise to raise the dog.

Do Morals Impact Contract Enforcement?

Although one might think that morals play a large part in contract law, they do not. In fact, morals lead to no type of obligation and do not serve as legal consideration.

Sometimes there are agreements established between two parties which go something like "Sue promises to give Tom something of extreme value as long as he will give her $1.00." In the eyes of the court, this is often frowned upon because it proves that a gift is covering up some type of bargained-for exchange.

When a promisor is attempting to oppose enforcement of a contract, most courts will allow him or her to try and prove that the consideration outlined in the contract was not ever given. When a nonpayment of a consideration, that was recited in a contract, has been made, this can be used as evidence that a bargained-for exchange did not take place.

What Is Past Consideration?

Past consideration is not a consideration. Basically, this means that a person cannot promise someone something in exchange for something that the promisor has already been given. For example, if Tom agrees to pay Sally $500 a week for 10 years worth of work after the work has been performed, then the benefit to the promisor has already been received. And the promise being promised is only going to take place after the benefit has already been received, meaning there wasn't a true exchange that took place.

There are some exceptions to the past-consideration-is-not-a-consideration rule:

  • Pre-existing debt: If someone promises to pay a pre-existing debt, and this debt has been excused because of a defense that is technical in nature, then the consideration is enforceable.
  • New promises for benefits received: This can be proved on the grounds of moral obligation and is often seen enforced as a means to prevent injustice.

There is another requirement that must be met in order for something to be considered as a valid consideration - it must in some way or another constitute a legal detriment to the person who it is being promised to. When legal detriment takes place, there has been a promise made that a person is not legally obligated to perform, this can mean that a person is promising to refrain from doing something that he or she has the legal right to do, such as smoking. The main point is that the promisor is promising to do something that he or she doesn't legally have to do.

If you need help understanding elements of an offer in contract law, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.