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.
Whether a nominal consideration is sufficient, is a question upon which there is a divergence of authority, especially in obiter.
In some jurisdictions a nominal consideration is said to be sufficient where the contract is not one for money or something the value of which is fixed by law in money, and the consideration is money or something the value of which is fixed by law in money.1
1Rude v. Levy, 43 Colo. 482, 24 L. R. A. (N.S.) 91, 96 Pac. 560.
2 Skerrett v. Presbyterian Society, 41 O. S. 606.
3 Skerrett v. Presbyterian Society, 41 0. S. 606.
1 England. Dutchman v. Tooth, 5 Bing. N. C. 577.
United States. Lawrence v. McCal-mont, 43 U. S. (2 How.) 426, 11 L. ed. 326; Davis v. Wells, 104 U. S. 150, 26 L. ed. 686; Silver v. Kent, 105 Fed. 840.
Alabama. Ross v. Parks, 93 Ala. 153, 30 Am. St. Rep. 47, 11 L. R. A. 148, 8 So. 368; Alabama Central R. R. Co. v. Long, 158 Ala. 301, 48 So, 363; Bethea v. McCullough, 195 Ala. 480, 70 So. 680.
California. Smith v. Bangbam, 156 Cal. 359, 28 L. R. A. (N.S.) 522, 104 Pac. 689.
Georgia. Southern Bell Telephone & Telegraph Co. v. Harris, 117 Ga. 1001, 44 S. E. 885.
Illinois. Guyer v. Warren, 175 111. 328, 51 N. E. 580.
Indiana. St. Clair v. Marquell, 161 Ind. 56, 67 N. E. 693.
Michigan. George v. Sohuman, - Mich. - , 168 N. W. 486.
Texas. Quebe v. Gulf, Colorado & Santa Fe Ry. Co., 9S Tex. 6, 81 S. W. 20.
Virginia. Watkins v. Robertson, 105 Va. 269, 115 Am. St. Rep. 880, 5 L. R. A. (N.S.) 1194, 54 S. E. 33.
Wisconsin. Rust v. Fitzhugh, 132 Wis. 549, 112 N. W. 508. See also obiter in Rohwer v. BurreM, 42 Utah 510, 194 Pac. 573.
"A valuable consideration, however small or nominal, if given or stipulated for in good faith, is, in the absence of fraud, sufficient to support an action on a parol contract." Lawrence v. Mc-Calmont, 43 U. S. (2 How.) 426, 452, 11 L. ed. 326.
"A cent or a pepper com, in legal estimation, would constitute a valuable consideration." Whitney v. Stearns, 16 Me. 394.
It is said to be a "technical legal consideration."2 A consideration of one dollar has frequently been held to be sufficient.3 One dollar,4 or two shillings and sixpence,5 or "one dollar • • • and other valuable consideration," 6 will support contracts to guaranty debts of considerable amount. A contract to convey a right of way for a railway in consideration of one dollar,7 or to grant the right to construct telegraph and telephone poles upon certain realty in consideration of one dollar,8 is enforceable. A consideration of one dollar expressed in an option for land,9 or for sixty-eight thousand dollars' worth of stock,10 or for one hundred bales of cotton,11 is sufficient. One dollar was said to be a sufficient consideration for an option to convey a right of way to a railway at forty-five dollars per acre, even if the said sum of one dollar was not in fact paid.12 A consideration of one dollar is sufficient to support a promise to divide future profits arising from a subsequent sale of land.13 A recital of one dollar as consideration for a mortgage for twelve hundred dollars is sufficient.14 A consideration of one dollar and an employment for one day at the usual rate of wages has been said to be a sufficient consideration for the release of a right of action for personal injury.15 One who takes under a deed which recites as a consideration "one dollar and love and affection," is not a mere volunteer.16 An oil lease, in consideration of one dollar, is said to be for value.17 Five dollars has been said to be sufficient consideration for a conveyance of land worth over six hundred dollars, so that the grantee, under such deed, has priority over a former grantee for full value under a deed which was not recorded.18 Whether equity will give specific performance of a contract to convey land of substantial value, in consideration of "$5.00 and other valuable considerations," has been discussed but not decided.19
2 Day v. Gardner, 42 N. J. Eq. 199, 7 Atl. 365. (A case in which the consideration was probably more than nominal.)
3 Alabama Central R. R. Co. v. Long, 158 Ala. 301, 48 So. 363; Bethea v. Mc-Cultough, 195 Ala. 480, 70 So. 680; Guyer v. Wanren, 175 111. 328, 51 N. E. 580; George v. Schuman, - Mich. - , 168 N. W. 486.
4 Lawrence v. McCalmont, 43 U. S. (2 How.) 426, 11 L. ed. 326; Davis v. Wells, 104 U. S. 159, 26 L. ed. 686.
5 Dutchman v. Tooth, & Brag. N. C. 677.
6Sihrer v. Kent, 105 Fed. 840.
7 Alabama Central R. R. Co. v. Long,
158 Ala. 301, 48 So. 363.
8 Southern, etc., Ry. v. Harris, 117 Ga. 1001, 44 S. E. 885.
9 Alabama. Wilkins v. Hardaway,
159 Ala. 565, 48 So. 678.
California. Smith v. Bangham, 156 Gal. 359, 28 L. R. A. (N. S.) 522, 104 Pac. 689.
Illinois. Guyer v. Warren, 175 111. 328, 51 N. E. 580. (The true consideration was fifty dollars.) Seyferth v. Groves and Sand Ridge R. R. Co., 217
111. 483, 75 N. E. 522; Adams v. Pea-body Coal Co., 230 111. 469, 82 N. E. 645.
Michigan. George v. Schuman, - Mich. - , 168 N. W. 486.
Virginia. Cummins v. Beavers, 103 Va. 230, 106 Am. St. Rep. 881, 48 S. E. 891.
West Virginia. Lowther Oil Co. v. Guffey, 52 W. Va. 88, 43 S. E. 101; Rease v. Kittle, 56 W. Va. 269, 49 S. E. 150.
Wisconsin. Kreutzer v. Lynch, 122 Wis. 474, 100 N. W. 887. Fifty cents was held to be a sufficient consideration in Ross v. Parks, 93 Ala. 153, 30 Am. St. Rep. 47, 11 L. R. A. 148, 8 So. 368.
10 Watkins v. Robertson, 105 Va. 260, 115 Am. St. Rep. 880, 5 L. R. A. (N.S.) 1194, 54 S. E. 33.
11 Cooper v. Dixie Cotton Co., 144 Ga. 33, 86 S. E. 242.
12 Seyferth v. Groves & Sand Ridge R. R. Co., 217 III. 483, 75 N. E. 522, (The sum of one dollar was tendered to the vendor and refused by him.)
13 Rust v. Fitzhugh, 132 Wis. 549, 112 N. W. 508.
14 Boiling v. Munchus, 65 Ala. 558.
In many of these cases, however, there was a substantial valuable consideration in addition to the nominal consideration. Subsequent advances made in reliance upon a guaranty; 20 a true consideration of fifty dollars for an option instead of the ostensible nominal consideration of one dollar;21 and a loan to the amount of the debt secured by mortgage, instead of the nominal consideration of one dollar,22 are all sufficient considerations which make it unnecessary to rely upon the nominal consideration. So in grants of rights of way, the benefit derived from the public service rendered by the grantee may constitute valuable consideration in addition to the nominal consideration, although it is usually the nominal consideration upon which the courts rely.23 The contract may have been under seal and therefore enforceable, irrespective of consideration.24