Issue: Under the laws of the state of Minnesota, is the recitation of payment of consideration in an agreement sufficient to support an option agreement, or must the option state separate, additional consideration?
|Area of Law:||Business Organizations & Contracts|
|Keywords:||Option agreement; Recitation of nominal consideration|
|Cited Cases:||544 N.W.2d 795; 364 N.W.2d 850; 58 N.W.2d 865; 396 N.W.2d 635; 831 S.W.2d 582|
The option agreement’s recitation of nominal consideration coupled with a denial that consideration was actually received does not settle the issue of whether sufficient consideration was alleged and in fact existed. 3 Eric Mills Holmes, Corbin on Contracts § 5.17 at 84 (rev. ed. 1996) [hereafter Corbin]; 14 Richard R. Powell & Patrick J. Rohan, Powell on Real Property ¶ 880 at 81A-48 (1997) [hereafter Powell] (noting common custom of stating there is consideration without defining the amount). There is no requirement at law that consideration given for a contract be translatable into dollars and cents, nor is there any requirement that something tangible actually pass from promisee to promisor. Craigmile v. Sorenson, 239 Minn. 383, 58 N.W.2d 865, 872 (1953) (agreement to pay consideration in future was sufficient and was not negated by false recitation of receipt); see also Chalmers v. Kanawyer, 544 N.W.2d 795, 798 (Minn. Ct. App. 1996); C&D Invs. v. Beaudoin, 364 N.W.2d 850, 853 (Minn. Ct. App. 1985). Corbin explains:
[C]onsideration is not made insufficient by the fact that it is a nominal or small one. Adequacy of consideration, as judged by general market standards, is no more required here than in other contract cases. Consideration sufficient to support the garden variety contract will likewise support an option.
Corbin, supra, § 11.7 at […]