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When it comes to legal and contractual agreements, the phrase “no consideration, no contract” is a common principle that states that in order for a contract to be valid, both parties must exchange something of value. In other words, there must be some form of consideration for the contract to be enforceable.

However, there are certain exceptions to the “no consideration, no contract” rule. Below are some scenarios where a contract may still be valid despite lacking consideration:

Promissory Estoppel

Promissory estoppel is a legal principle that allows a party to enforce a promise made to them, even if there was no consideration exchanged. This principle is often invoked in situations where one party has relied on a promise made by another, only for the other party to later backtrack or renege on the promise.

For instance, if a company promises an employee a bonus based on their performance, the employee can enforce that promise even if they did not provide any additional consideration in exchange. This is because the employee relied on the promise and took certain actions or made certain decisions based on that promise.

Contracts under Seal

A contract under seal is a special type of contract that is signed and sealed by the parties involved. Unlike regular contracts, contracts under seal do not require consideration in order to be enforceable.

This exception is rooted in historical legal traditions, and is still recognized in some jurisdictions today. However, in most areas, a contract under seal is seen as a relic of the past and is rarely used in modern business.


Gifts are another exception to the “no consideration, no contract” rule. If one party voluntarily and without expectation of compensation gives something to another party, that gift is generally considered valid and enforceable.

For instance, if a person gives their friend a painting as a gift, that painting becomes the friend`s property and the giver cannot later demand compensation or ask for the painting back.


While “no consideration, no contract” is a fundamental principle of contract law, there are certain exceptions that allow for enforceable agreements even in the absence of consideration. These exceptions include promissory estoppel, contracts under seal, and gifts. As always, it`s important to consult with a legal professional to ensure that any contract or agreement you enter into is valid and enforceable under the relevant laws.