Consideration clause

Consideration clause

A consideration clause outlines payment in exchange for the promise of something of value, like a service, property, a promise etc.

What is a consideration clause?

A consideration clause is a provision most commonly used in insurance policies that provides information on how much the coverage costs and when to pay. Other industries can also use consideration clauses. In real estate agreements, consideration clauses outline compensation according to the terms of the contract.

What does consideration mean in an agreement?

Consideration is basically when one party promises to do something they are not legally compelled to do, like selling their car, providing a service, etc. in exchange for the promise of being compensated. This promise is the consideration for the service or property.

Deferred consideration

In certain instances, consideration can be deferred. This could be done by spreading out the payment instead of paying everything at once. When acquiring a company, for example, certain payment milestones can be linked to performance goals. This serves to ensure that the buyer receives the promised value they purchased.

Replace all your tools with an end-to-end legal platform

Sign your next contract with just one tap

Create, Sign, Organize & Automate your contracts

Build smart documents and eliminate errors

Collaborate on all your legal work in one place

testimonial phots

Trusted by over 5000+ customers

TED
Luggage Hero
Max Burgers
Max Burgers

Request a demo