Consideration Substitute
From the Latin Latin: consideratio, meaning 'deliberation' or 'regard.'.
A replacement for the usual exchange of value needed to make a contract binding.
Plain English
Normally, a contract requires consideration—something of value given by each side—to be legally binding. A consideration substitute is an alternative that courts sometimes accept in place of traditional consideration. For example, a written promise signed by one party, or reliance by the other party on an oral promise, can sometimes substitute for consideration. This doctrine helps enforce promises that seem fair even if there's no true back-and-forth exchange.
Example
A grandfather promises his grandson in writing that he'll pay for college tuition. Even though the grandson doesn't give anything in return, courts in some states might enforce this promise using consideration substitute because the grandson relied on it by enrolling in school.
Used in a sentence
“The court found that the employee's continued work served as a consideration substitute for the employer's promise of a raise.”
Related terms
This page is a plain-English reference and is not legal advice. Laws vary by jurisdiction and change over time. For specific situations consult a licensed attorney.