§71. REQUIREMENT OF EXCHANGE; TYPES OF EXCHANGE

(1) To constitute consideration, a performance or a return promise must be bargained for.

(2) A performance or return promise is bargained for if it is sought by the promisor in exchange for his promise and is given by the promisee in exchange for that promise.

(3) The performance may consist of

(a) an act other than a promise, or

(b) a forbearance, or

(c) the creation, modification, or destruction of a legal relation.

(4) The performance or return promise may be given to the promisor or to some other person.

It may be given by the promisee or by some other person.

Comments:

b. "Bargained for." In the typical bargain, the consideration and the promise bear a reciprocal relation of motive or inducement: the consideration induces the making of the promise and the promise induces the furnishing of the consideration. Here, as in the matter of mutual assent, the law is concerned with the external manifestation rather than the undisclosed mental state: it is enough that one party manifests an intention to induce the other's response and to be induced by it and that the other responds in accordance with the inducement....But it is not enough that the promise induces the conduct of the promisee or that the conduct of the promisee induces the making of the promise; both elements must be present, or there is no bargain. Moreover, a mere pretense of bargain does not suffice, as where there is a false recital of consideration or where the purported consideration is merely nominal. In such cases there is no consideration and the promise is enforced, if at all, as a promise binding without consideration under §§82-94.

c. Mixture of bargain and gift. In most commercial bargains there is a rough equivalence between the value promised and the value received as consideration. But the social functions of bargains include the provision of opportunity for free individual action and exercise of judgment and the fixing of values by private action, either generally or for purposes of the particular transaction.

Those functions would be impaired by judicial review of the values so fixed. Ordinarily, therefore, courts do not inquire into the adequacy of consideration, particularly where one or both of the values exchanged are difficult to measure. See §79.....

d. Types of consideration....Though a promise is itself an act, it is treated separately from other acts.

§72. EXCHANGE OF PROMISE FOR PERFORMANCE

Except as stated in §§73 and 74, any performance which is bargained for is consideration.

Comment:

a. Enforcement of bargains. Section 17(1) embodies the principle that bargains are enforceable unless some other principle conflicts. Chapter 3 on Formation of Contracts-Mutual Assent deals with one essential element of a bargain, agreement; this Topic on the Requirement of Consideration deals with the other essential element, exchange....

d. Unconscionable and illegal bargains. The rule stated in this Section does not require that consideration have an economic value equivalent to that of the promise. See §79. Nor does the Section require that the consideration or the promise be lawful. The problems raised by unconscionable and illegal bargains are dealt with in §208 on unconscionability, Chapter 6 on mistake, Chapter 7 on misrepresentation, duress and undue influence, and Chapter 8 on unenforceability on grounds of public policy. In addition, particular types of bargains which are likely to be unconscionable are the subject of §§73 and 74.