Consideration in contract law is the value or benefit given by each party in exchange for the other party’s value or benefit—such as money in exchange for products or services, or mutual promises exchanged. Consideration is often referred to as the bargained-for exchange in which one consideration is exchanged for another consideration.
A mere promise to do or refrain from doing something that lacks consideration in the form of a value or benefit provided by the other party (a return promise) is not a contract and is generally not enforceable. One exception to this rule may be if one party promises to do or refrain from doing something, and the second party relies on that promise to its detriment (by spending money, for example), the detrimental reliance may create an enforceable contract.
And if the consideration for a contract is so insubstantial that it is worthless, the contract is said to be illusory and is not enforceable.
In Alaska, as in other states, consideration is a fundamental component of a valid contract. Consideration refers to something of value that is exchanged between parties when entering into a contract. It can be money, services, goods, or a promise to perform or refrain from a specific action. Without consideration, a contract may not be enforceable because it lacks the element of a bargained-for exchange. However, Alaska recognizes the doctrine of promissory estoppel, which means that if one party makes a promise and the other party relies on that promise to their detriment (such as incurring expenses), the promise may be enforceable even without consideration. This is to prevent injustice due to the relying party's reasonable assumption that the promise would be fulfilled. Lastly, if the consideration is nominal or so insignificant that it does not constitute a real detriment to the party promising it, or a real benefit to the party receiving it, the contract may be deemed illusory and unenforceable in Alaska.