Also known as: bargained-for exchange · consideration
Written by attorneys · grounded in primary & secondary sources — see below
A mutual exchange of promises or performances in which each party seeks to induce the other to act or refrain from acting. The exchange supplies the consideration that renders a promise enforceable as a contract.
Brian Bailey, facing foreclosure on his home, transferred the deed to Boreal Energy in exchange for full discharge of the outstanding mortgage balance. Boreal accepted the deed and recorded it, treating the transfer as complete satisfaction of the debt. The bargained exchange allowed Brian to avoid foreclosure proceedings and released him from further liability on the note.
President Bernard Bass delivered the annual address to Congress and recommended new legislation on infrastructure funding. In return, congressional leaders agreed to schedule hearings on the proposals. No bargained exchange existed because the constitutional duty to recommend measures creates no mutual inducement or consideration.
Select any source to read its text and confirm it supports the definition.
Barbara Bennett offered to pay Byron Bishop $75,000 to settle his personal-injury claim arising from a car accident. Byron accepted the offer during negotiations. Because the payment constituted valuable consideration in compromise of the disputed claim, evidence of the offer remained inadmissible at trial.
Brendan Burns promised to watch Bethany Boyd's children while she ran an errand. When one child wandered into traffic, Brendan failed to intervene promptly. The bargained exchange was absent because Brendan undertook the service gratuitously, yet liability still attached for harm caused by his careless performance.
Bright Path Foods was hit with a large punitive award after a product caused severe burns. The company argued the award violated due process. No bargained exchange existed between the parties, so the court measured the ratio of punitive to compensatory damages solely against the actual-harm baseline.
Bernard Bass and Barbara Bennett signed a marital property agreement allocating future earnings. No money changed hands at signing. The bargained exchange was unnecessary because the signed document alone rendered the agreement enforceable under the uniform act.
A bargained exchange requires each party to seek to induce the other to act or refrain from acting. A gratuitous promise lacks this mutual inducement and therefore supplies no consideration.
No. The employee performs no additional act or forbearance after retirement in exchange for the promise, so the required inducement is missing.
No. A bargained exchange may consist of mutual promises or an act in return for a promise. Monetary consideration is not required.
The agreement is enforceable without consideration, so the absence of a bargained exchange does not affect validity once the document is signed by both spouses.
…of any information obtained as a consequence. Nor can it be claimed that judicial time and effort, assuming that is a relevant consideration, will be conserved because of the ease of application of the new rule. Today's decision leaves open such questions as whether the accused was in custody, whether his statements were…