Bargain Theory of Consideration Law and Legal Definition

This theory states that a promise or performance that is bargained in exchange for a promise is a consideration for the promise. This theory underlies all bilateral contracts. Bargain theory of consideration was developed from classical contract theory which constitutes a wholly executory contract. Bargain theory of consideration was found by some lawyers in the notion that a contract is a bargain in which the consideration is the price of the bargain. Connected to this is the supposed rule that nothing can be treated as a consideration unless it is seen by the parties as the ‘price’ of the bargain.