An essential element of an enforceable contract is consideration. Consideration is any benefit conferred, or agreed to be conferred, upon the promisor [a person who makes a promise] by any other person, to which the promisor is not lawfully entitled, or any prejudice suffered, or agreed to be suffered, by such person, other than such as he is at the time of consent lawfully bound to suffer, as an inducement to the promisor, is a good consideration for a promise. (Civ. Code, § 1605)

Past consideration is not sufficient to support a contract. The courts determine the sufficiency of the consideration as of the time the parties entered into the contract, not in relation to a subsequent time. 

The consideration for a promise must actually be bargained for and given in exchange for the promise. For example, promise by one shareholder to another not to vote for increased officer compensation without other’s agreement was unenforceable gratuitous promise because it was not induced by, or given, to induce return promise or performance. An attorney who arranged loan could not enforce subsequent promise by grateful borrower to transfer stock to attorney. No act of an offeree can constitute consideration binding on the offeror unless the latter agrees to be bound in return. The fact that the promisee relies on the promise to the promisee’s injury, or the promisor gains some advantage, does not establish consideration without the element of bargain or agreed exchange.  

Consideration is not adequate when it is a mere promise to perform what the promisor is already legally bound to do. For example, a promise of extra compensation for completion of a contract, made to a party who has the existing legal duty to perform the contract, is without consideration.