What Is Consideration?
Under Florida law, a promise is not legally enforceable just because it is written down. For a contract to be valid, there must be a bargained-for exchange of value between the parties. This exchange of value is known as consideration.
If someone promises to give you their house for free and writes it on a napkin, that is a "gratuitous promise," not a contract, because you gave them nothing in return. However, if you promise to pay them $300,000 for the house, the money is your consideration, and the house is their consideration. Because value is being exchanged on both sides, a binding contract is formed.
Consideration in Real Estate Deeds
Every valid Florida deed must explicitly state that consideration was exchanged. When you look at a recorded Warranty Deed, the very first paragraph almost always includes the phrase:
"...for and in consideration of the sum of Ten Dollars ($10.00) and other good and valuable consideration..."
The parties do not actually have to hand each other a ten-dollar bill. This is a standard legal fiction used to satisfy the strict common law requirement that consideration must exist to validate the transfer of title. The actual, full purchase price is kept private and does not need to be printed on the public deed.
Forms of Consideration
Consideration does not have to be cold hard cash. It can be:
- A Promise to Perform — Signing a mortgage is a promise to pay the bank over 30 years in exchange for the upfront cash to buy the house.
- Forbearance — A promise not to do something you have the legal right to do. For example, a landlord might forgive a tenant's late fees (consideration) in exchange for the tenant promising not to sue them for a broken air conditioner (consideration).
- Love and Affection — When parents use a Quitclaim Deed to gift a house to their child, they aren't receiving money. Florida courts generally accept "love and affection" as sufficient consideration for intrafamily transfers.
Related Terms
- Contract — Requires consideration to be enforceable
- Deed — Must recite nominal consideration (the $10 clause)
- Earnest Money — A deposit that serves as immediate, tangible consideration in a purchase
Barnes Walker Real Estate Contracts
Barnes Walker's attorneys draft complex commercial and residential real estate contracts, ensuring that adequate consideration is explicitly defined so that the agreements remain fully enforceable in Florida courts. Request a legal inquiry for assistance.
Reviewed by the attorneys at Barnes Walker, Goethe, Shea & Robinson, PLLC