Legal Memorandum: Consideration for a contract defined

Issue: Under Illinois law, what is consideration for a contract or agreement?

Consideration is a bargained-for exchange that may consist of a promise, an act or a forbearance. Carter v. SSC Odin Operating Co., LLC, 2012 IL 113204, ¶¶ 22-23. A bargained-for exchange exists if one party’s promise induces the other party’s promise or performance. Ross v. May Co., 377 Ill.App.3d 387, 391 (2007).  Mutual and concurrent promises provide sufficient legal consideration to support each other. Solimini v. Thomas, 293 Ill.App.3d 430, 437 (1997). The compromise of a disputed claim, or a promise to forego pursuit of a potential claim, is sufficient consideration for a settlement agreement. Kalis v. Colgate-Palmolive Co., 337 Ill.App.3d 898, 900-01 (2003); F.H. Prince & Co. v. Towers Financial Corp., 275 Ill.App.3d 792, 799 (1995); In re Estate of Herwig, 237 Ill.App.3d 737, 741 (1992). It is not necessary that a person waiving a cause of action receive satisfaction in money. See, e.g., Wilson v. Hoffman Group, Inc., 131 Ill.2d 308, 321 (1989) (waiver of worker’s compensation lien was held to constitute consideration); Stacy v. Ametek, Inc., 205 Ill.App.3d 58, 61 (1990) (same).

Adgooroo, LLC v. Hechtman, 2016.IL.142531-U (Ill. App. Dist. 1. Jan. 28, 2016) (not precedential).

Date: March 1, 2016
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