This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
In discussing all the types of consideration, it must be kept in mind that consideration is an essential element of a contract, and not something foreign to it and outside of it; that the consideration invoked to support the contract must be that contemplated by the offer and acceptance,1 and that consideration does not dispense with offer and acceptance. Accordingly, if the offer is such as to require a communication of acceptance, and no such communication is made to the offeror, there is no contract, and the subsequent voluntary act or forbearance, even though exactly what was required by the offer, is not a consideration, as there is no contract in which it can be an element. Actual forbearance without any previous promise to forbear,2 is no consideration, since no obligation to forbear rested on the party who forbears. So the assumption of an obligation, as voluntarily assuming a debt after a deed was delivered, which assumption was not required as a term of delivery,3 or payment of a draft,4 or marriage,5 are not considerations for promises if not made in reliance thereon, under an acceptance thereof. So where A let B take certain property on consideration that B would give A B's note, with C as surety, and C signed after the transaction without knowing of the transaction between A and B, A knowing that C did not know, no consideration for C's promise exists.6 Expenditure of money in investigating land is no consideration for a prior option given gratuitously for the sale of such land, if such option does not require such investigation.7 Payment by A under order of court as receiver, would not constitute a consideration where the-contract contemplates a payment by A individually.8 The voluntary payment by
2 Davis v. Morgan, 117 Ga. 504, 43 S. E. 732; Worth v. Daniel, 1 Ga. App. 15, 57 S. E. 898.
3 Worth v. Daniel, 1 Ga. App. 15, 57 S. E. 808.
4 Worth v. Daniel, 1 Ga. App. 15, 57 S. E. 898.
5 See Sec. .566.
1 United States. Harris v. Davis, 44 Fed. 172.
California. Commercial Bank v. Red-field, 122 Cal. 405, 55 Pac. 160 [modified, 55 Pac. 7721; Estate of Thomson, 165 Cal. 290, 131 Pac. 1045.
Illinois. English v. Landon, 181 111. 614, 54 N. E. 011.
Indiana. Taylor v. Lehman, 17 Ind. App. 585, 46 N. E. 84 [rehearing denied, 47 N. E. 2301.
Kentucky. Torian v. Fuqua, 175 Ky. 428, 194 S. W. 359.
Maine. Smith v. Bibber, 82 Me. 34, 17 Am. St. Rep. 464, 19 Atl. 89.
Massachusetts. French v. Bank, 179 Mass. 404, 60 N. E. 793.
New York. Hollins v. Hubbard, 165
N. Y. 534, 59 N. E. 317. "Reliance upon a promise gives it no new validity when such reliance is not the conventional inducement of the promise; that is to say, when it is not contemplated by the terms of the bargain as the equivalent of the promise." French v. National Bank, 179 Mass. 404, 408, 60 N. E. 793 [citing Manter v. Churchill, 127 Mass. 31; Bragg v. Danielson, 141 Mass. 195, 4 N. E. 622; Martin v. Meles, 179 Mass. 114, 60 N. E. 397].
"That which is a mere fortuitous result flowing accidentally from an arrangement but in no degree prompting the actors to it, is not to be esteemed a legal consideration." Kirkpatrick v. Muirhead, 16 Pa. St. 117, 126 [quoted, Fire Ins. Association v. Wickham, 141 U. S. 564, 579, 35 L. ed. 860]. "Nothing is consideration that is not regarded as such by both parties." Philpot v. Gruninger, 81 U. S. (14 Wall.) 570, 577, 20 L. ed. 243 [quoted, Fire Ins. Association v. Wickham, 141 U. S. 564, 579, 35 L. ed. 860].
2 California. Shadburne v. Daly, 70 Cal. 355, 18 Pac. 403; Estate of Thomson, 165 Cal. 290, 131 Pac. 1045.
Kentucky. Steadman v. Guthrie, 61 Ky. (4 Met.) 147; Haldeman v. Bank (Ky.), 44 S. W. 383.
Maine. Smith v. Bibber, 82 Me. 34, 17 Am. St. Rep. 464, 19 Atl. 89.
Massachusetts. Manter v. Churchill, 127 Mass. 31.
Michigan. Rohrig's Appeal, 176 Mich. 407, 142 N. W. 561.
Oregon. First National Bank v. Cecil, 23 Or. 58, 31 Pac. 61, 32 Pac. 303.
Virginia. Saunders v. Bank, 112 Va. 443, 71 S. E. 714.
3 Commercial Bank v. Redfield, 122 Cal. 405, 55 Pac. 160 [modified, 55 Pac. 7721; Jenkins v. University, 17 Wash. 160, 49 Pac. 247 [modified, 17 Wash. 173, 50 Pac. 785].
Contra, where the debt was assumed after delivery of the deed but at grantor's request. Doran v. McConlogue, 150 Pa. St. 98, 24 Atl. 357.
4 Where A voluntarily promised to surrender a bill of lading of cotton to a bank and thereupon without notifying A of the facts the bank paid a draft drawn against such cotton by A's principal, there was no consideration for A's promise. Hollins v. Hubbard, 165 N. Y. 534, 59 N. E. 317.
5Lafontain v. Hayhurst, 89 Me. 388, 56 Am. St. Rep. 430, 36 Atl. 623.
6 Ellis v. Clark, 110 Mass. 389, 14 Am. Rep. 609. "The consideration or motive of the promise must be known to the promisor." a debtor, of the debt before it is due, does not discharge him from other covenants made by him in consideration of the creation of such debt in the absence of a specific agreement therefor.9 Payment of an amount which is conceded to be due, without attaching any conditions thereto, does not prevent the recovery of disputed items arising out of the same transaction.10 If the vendee is given an option without consideration upon goods up to a certain quantity, the fact that he voluntarily orders and pays for a part of such goods thereafter, does not amount to a consideration as to the option upon the remaining goods.11 If A gives a gratuitous option to B, the fact that B voluntarily incurs expense in reliance thereon does not amount to a consideration,12 even if A suggests that B incur such expense.13 The act of one to whom a gratuitous option is given in sending an agent to France to investigate business conditions before asking for such option, is no consideration therefor.14 If A gives an option upon certain property to B, and B does not agree to do any work or expend any money, in order to sell such property to a third person, the fact that B does work or expends money in reliance upon such option does not amount to a consideration.15 If B had agreed to do such work or to expend such money, the same work or expenditure on B's part would have been a consideration.16 If A makes an offer to B, the fact that B buys property to enable him to perform such contract is not a consideration for A's promise not to revoke such offer.17
7Corbett v. Cronkhite, 239 111. 9, 87 N. E. 874.
8 Utah Savings & Trust Co. v. Bamberger, 31 Utah 139, 86 Pac. 961.
The cases given can be explained on the theory that there was really no contract between the parties. Similar states of fact can be explained on the theory of a lack of mutuality.18 Thus where A promised B to leave him all his property if B would remain near him so as to assist him if needed, B did not promise, but did so remain, A's promise was held unenforceable against A's estate, as wanting in mutuality.19 There is no inconsistency between these two theories. In most cases where mutuality is wanting, there is no offer and acceptance, and consequently no consideration for either promise. If a gratuitous promise is made, the subsequent act of the promisee in conferring a favor upon the promisor voluntarily and gratuitously can not be invoked as a consideration for such promise. Thus where A promised B, without consideration, to extend the time of payment of a debt, B's subsequent act of paying interest voluntarily a few days before it was due is no consideration for A's promise.20 If the contract for extension of time calls for payment of part of the debt when due, no consideration exists, though payment is in fact made to the bank holding the note for collection and credit given on such note a day before it is due.21
9 Feigenspan v. Nizolek, 71 N. J. Eq. 382, 65 Atl. 703.
10 Argus v. Ware, 156 Ia. 583, 136 N. W. 774.
11 Atlanta Buggy Co. v. Hess Spring & Axle Co., 124 Ga. 338, 52 S. F. 613; Rehm-Zeiher Co. v. F. G. Walker Co., 156 Ky. 6, 49 L. R. A. (N.S.) 694, 160 S. W. 777. See Sec. 123.
Contra, Cooper v. Lansing Wheel Co., 94 Mich. 272, 34 Am. St. Rep. 341, 54 N. W. 39.
12Sucrerie Central Coloso de Porto Rico v. Fajardo, 248 Fed. 432; Axe v. Tolbert, 179 Mich. 556, 146 N. W. 418.
13Sucrerie Central Coloso de Porto Rico v. Fajardo, 248 Fed. 432.
14Bosshardt & Wilson Co. v. Crescent Oil Co., 171 Pa. St. 109, 32 Atl. 1120.
15Axe v. Tolbert, 179 Mich. 556, 146 N. W. 418.
16See Sec. 123.
17 Brown Bros. Lumber Co. v. Preston Mill Co., 83 Wash. 648, 145 Pac. 964.
18See Sec. 565 et seq.
A consideration may be agreed upon as well impliedly as expressly.22 Thus if an agreement for forbearance for a reasonable time can be inferred from the conduct of the parties, forbearance is as much a consideration as if it had been expressly stipulated for.23 A guaranty to pay the note of another a certain time after maturity, with actual forbearance for that time, may justify a finding of an agreement to delay for such time.24 A promise by a materialman to waive his lien is supported by a consideration where in reliance thereon the owner pays the contractor, instead of withholding payment pending contractor's liens.28