Which statement about consideration is true?

Which statement about consideration is true?

• A. Past consideration is valid
• B. Adequacy of consideration must reflect objective value
• C. Preexisting duty rule does not bar consideration
• D. Past consideration is not valid

Answer: (D)

Consideration requires a bargained-for exchange: something given in return for a promise, created at the time the promise is made. Past acts or forbearance don’t fit that rule because they occur before the promise and there’s no exchange prompted by the promise itself. That’s why a promise relying on past consideration is unenforceable—the necessary bargained-for exchange is missing. So the statement that past consideration is not valid captures the fundamental rule: there must be new consideration at the time of the agreement. By contrast, insisting that past consideration is valid would ignore this exchange requirement. Regarding adequacy, the law doesn’t demand that the value exchanged be equal or objectively equivalent, as long as something of value is given. Finally, the preexisting duty rule bars a promise to pay for something already legally owed; merely performing a preexisting duty typically cannot serve as consideration for a new promise.

Consideration requires a bargained-for exchange: something given in return for a promise, created at the time the promise is made. Past acts or forbearance don’t fit that rule because they occur before the promise and there’s no exchange prompted by the promise itself. That’s why a promise relying on past consideration is unenforceable—the necessary bargained-for exchange is missing.

So the statement that past consideration is not valid captures the fundamental rule: there must be new consideration at the time of the agreement. By contrast, insisting that past consideration is valid would ignore this exchange requirement. Regarding adequacy, the law doesn’t demand that the value exchanged be equal or objectively equivalent, as long as something of value is given. Finally, the preexisting duty rule bars a promise to pay for something already legally owed; merely performing a preexisting duty typically cannot serve as consideration for a new promise.