MBE Rules · Contracts
Bargain theory of consideration
Restatement §71
The rule
Consideration requires a bargained-for exchange of legal detriment. The promise must induce the detriment AND the detriment must induce the promise. Gift promises, past consideration, and moral obligation generally do not suffice.
In plain English
For a contract to be valid, both sides must agree to give up something of value in exchange for the other party's promise. Promises made as gifts or based on past actions don't count.
Worked example
The buyer promises to pay $100 for the defendant's old bike. The buyer's payment and the defendant's bike are exchanged because each party wants what the other offers, making it a valid contract.
Memory hook
Bargain Basics: Promise for a Price. Consideration demands a mutual exchange, not a one-sided gift.
The trap
Students think: any promise is enough. Wrong, because a gift lacks exchange. The actual test is mutual inducement.
How examiners test it
The MBE loves: promise made after a favor done. Trap: students assume past acts count as consideration — but they don't without new inducement.
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