• Explanation

Both parties to a contract must provide legally sufficient consideration A benefit (eg, an act, money, a return promise) bargained for and received by the promisor from a promisee. to form an enforceable contract.  A contract in which only one party has obligations is not valid.  Common types of consideration are paying money, rendering services, and relinquishing legal rights (eg, agreeing not to sue) (Choice B).  If the consideration consists of services, it does not matter if the services are being performed by a party to the contract or a third party (Choice D).

However, consideration is insufficient, and therefore results in an unenforceable contract, if the consideration is for:

• Past services or actions:  If one party agrees to pay another party for services or acts the other party has already performed, consideration is insufficient.  For example, Brook finds and returns Grove's lost dog.  Grove's subsequent promise to pay Brook $1,500 does not create an enforceable contract because Brook's consideration (returning the dog) has already been performed.
• Preexisting duty:  If one party agrees to pay another party for services or acts the other party is already required to do, consideration is insufficient.  Examples include duties already specified in a contract that is being modified, a parent's support of a child, or a public employee's duty (eg, police protecting the public).

(Choice C)  The value or amount of the consideration is not considered when determining if there is legally sufficient consideration.

Things to remember:
Consideration provided to a party in a contract is insufficient if it is for services that have already been performed or for performance of a preexisting duty (eg, police protecting the public).  Insufficient consideration renders a contract unenforceable.