Legalese Translated: Consideration

Tired of reading contracts that appear to use English words, but you have no idea what they mean? At TV Juriste, we feel your pain. This site was created by someone whose prior computer experience consisted of being a pretty good Googler, but HTML, CSS – those were just a bunch of letters. So, we get it. We not only feel your pain, we’ve created a feature to help you. Periodically, TV Juriste will post helpful explanations of terms you see in your contracts, but which are rarely explained. If you have a term you’d like to see included as part of this series, please add it to the comments section.

First, legalese word translated — CONSIDERATION.

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Consideration = Something valuable, rather than nothing at all.

Short Explanation

Courts will not enforce contracts unless there is an exchange of consideration between the parties.

Example: Party 1’s consideration (money or promises) + Party 2’s consideration (money or promises) = a valid contract of mutually enforceable promises.

Contract

Example: Party 1’s consideration + nothing from Party 2 = Better Call Saul!

Extended Explanation

The legal dictionary definition of consideration is that consideration must be something of value given by parties to a contract. However as you probably realize from your own life, contracts frequently include exchanges that are not of equal value. Contract law doesn’t require an equal exchange;each party has to give something.

What Counts as Consideration

  • A promise to do something
  • A promise to refrain from doing something
  • Performing some action desired by another party
  • Money

Why This Matters

Aggressive lawyers, who slept through their their contracts course, sometimes draft severely lopsided agreements lacking any form of consideration. Make sure you’re not asked to sign something where someone does not give consideration. Also, make sure lawyers working for you do not use contracts that lack consideration because you may end up realizing that the contracts won’t stand up in court.

Example: Ella Enthusiastic promises not to work with any other production companies for 6 months (i.e., a 6-month exclusivity period).
In exchange the production company:

  • films lengthy interviews with Ella for a sizzle reel,
  • does not pay Ella for her time,
  • owns the footage,
  • does not promise to include Ella in the sizzle reel or in any program that could result from pitching the sizzle reel,
  • doesn’t even promise to pitch the show to networks.

Now ask yourself: in the scenario described above, has the production company given Ella anything of value to Ella in exchange for using her services and keeping her away from other production companies for 6 months?

Ella should talk to a lawyer. Even if she doesn’t convince the company to remove the exclusivity provision, perhaps the company at least will promise to use good faith efforts to pitch a show based on the sizzle reel.

And, that’s what consideration is . . .¬†something¬†more than nothing.