For a contract to be legally binding, it must be supported by consideration. Illinois Jurisprudence, Commercial Law § 1:32. Illinois courts have held that consideration is one of the requirements to prove that a valid contract exists. Meyers v. Woods, 374 Ill.App.3d 440, 450 (3d Dist. 2007).
Whether there is sufficient consideration to establish that a valid contract exists is a question of law. Illinois Jurisprudence, Commercial Law § 1:34. The burden of proving that there is sufficient consideration is on the party seeking to enforce the contract. Id. The sufficiency of consideration must be evaluated as it relates to the entire record, not as perceived in a vacuum of either terms or definitions. Illinois Jurisprudence, Commercial Law § 1:35. The burden of proving the sufficiency of consideration is upon the party asserting it. Id.
Generally, Illinois courts will not inquire into the sufficiency of the consideration to support a contract. United City of Yorkville v. Village of Sugar Grove, 376 Ill.App.3d 9, 22 (2d Dist. 2007). As long as the consideration is a bargained-for exchange, the amount the parties assign to a particular asset constitutes legally adequate consideration. Illinois Jurisprudence, Commercial Law § 1:36. Moreover, Illinois courts have held that a court's inquiry into whether a contract is supported by consideration does not extend to examining the adequacy or sufficiency of the consideration. Gavery v. McMahon & Elliott, 283 Ill.App.3d 484, 490 (1st Dist. 1996). Illinois courts have stated that it is not a court's function to review the amount of consideration. Id.
Moreover, Illinois courts have held that mutual and concurrent promises provide sufficient legal consideration to support each other. Solimini v. Thomas, 293 Ill.App.3d 430, 437 (2d Dist. 1997). Where there is no other consideration for a contract, the mutual promises of the parties constitute the consideration. Illinois Jurisprudence, Commercial Law § 1:48. However, these promises must be binding on both parties, or the contract fails. Id. If a promise is merely illusory, in that it does not bind one party, that promise will not constitute consideration and will not support a contract. Id.
However, Illinois courts have held that where the amount of consideration is so grossly inadequate as to shock the conscience of the court, the consideration is insufficient and the contract will fail. United City of Yorkville, 376 Ill.App.3d at 22. Upon such inquiry, adequacy and sufficiency of consideration is to be determined as of the time the parties entered into the contract. Illinois Jurisprudence, Commercial Law § 1:36. Evidence of gross inadequacy of consideration has been considered by some Illinois courts as tantamount to fraud, whether actual or constructive. Illinois Jurisprudence, Commercial Law § 4:16. Mere inadequacy of consideration, in the absence of fraud or unconscionable advantage, ordinarily is insufficient to justify setting aside a contract. Gavery, 283 Ill.App.3d at 490-91.
Illinois courts have found that consideration does not exist where a promise to do something one is already obligated to do. Illinois Jurisprudence, Commercial Law § 1:40. The pre-existing duty rule provides that where a party does what it is already legally obligated to do, there is no consideration as there is no detriment. Id. Illinois courts have held that consideration cannot flow from an act performed pursuant to a pre-existing legal duty. Id. Furthermore, consideration is not insufficient merely because it is a conditional promise, even though the controlling event may never occur. Illinois Jurisprudence, Commercial Law § 1:38. Where the consideration is a party's promise to perform in the future, the consideration does not fail because of non-performance, since the promise, and not the performance, is the real consideration. Id.
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