It would be unfair for courts to hold people to every promise that they make because many promises are made in jest or without sufficient forethought. Thus, to be legally enforceable, a promise must be made in return for consideration, which consists of two general elements: bargained-for exchange and legal detriment.
A. Bargained-for Exchange
A performance or return promise is bargained-for if it is sought by the promisor in exchange for his promise, and it is given by the promisee in exchange for that promise. (Rest. 2d. § 71(2).) The bargain requirement serves the purpose of distinguishing between enforceable promises and ordinary gifts.
A promise to make a gift is unenforceable, not only because it is not bargained-for but also because the offeree suffers no legal detriment. Example: A says to B, “I promise to buy you a new car.” A is not legally bound to buy B a car because A’s promise was not made as part of a bargain in exchange for some return benefit from B. There is no consideration for A’s promise.
2. Bargain v. Precondition
Performance of a bargain benefits the promisor and therefore is valid consideration. Performance of a precondition does not benefit the promisor and is not consideration. Example: X promises his sister a place to raise her family if she comes to visit him. She incurs the expense of moving, but X changes his mind. X is not legally bound to keep his promise, because no consideration was given for it. The moving expenses were incurred as a precondition to fulfilling his request. X did not bargain that he would give his sister a place to stay in exchange for her incurring moving expenses.