Also known as: absent consideration · lack of consideration
Written by attorneys · grounded in primary & secondary sources — see below
A failure of the bargained-for exchange or legal detriment required for contract formation. One party's promise supplies no consideration when it imposes no new legal obligation or when the other party already owes the same performance under a preexisting duty.
Andre Antoine chartered a vessel from Ariana Azizi to deliver cargo for a fixed price. After departure Azizi demanded an extra $200,000 citing rough seas and took a slightly longer route. Antoine refused payment. The court held Azizi's performance of the original duty supplied no consideration for the added promise.
Ashford Manufacturing sent Apex Dynamics a signed record offering to sell specialized parts and assuring the price would remain open for sixty days. Apex ordered the parts within that period. Ashford attempted to revoke citing absence of consideration for the assurance. The statute prevented revocation for lack of consideration.
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Apollo Energy submitted a paving subcontract bid to Artemis Logistics. Artemis used the bid in its own successful proposal to the owner. Apollo later discovered an error and tried to revoke. Artemis accepted the bid after award. The court enforced the offer under promissory estoppel even though no consideration supported an option contract.
Performance of a preexisting duty supplies no consideration when the promisor undertakes no new legal obligation beyond what the original contract already required. A modification therefore fails for absence of consideration if the performing party merely continues the same duty under changed circumstances.
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A signed firm offer by a merchant is irrevocable for the stated time or a reasonable time up to three months even without consideration. The statute expressly removes the common-law requirement of consideration for such assurances in signed records.
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Reasonable and foreseeable reliance by the offeree can make an offer irrevocable even though no consideration supports an option contract. The offeror becomes bound to keep the offer open to the extent necessary to avoid injustice from the induced change of position.
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…position affords a compelling basis also for implying a subsidiary promise not to revoke an offer for a bilateral contract. The absence of consideration is not fatal to the enforcement of such a promise. It is true that in the case of unilateral contracts the Restatement finds consideration for the implied subsidiary promise in the part…