Legal Definition of the Term Consideration

[gettingby]

Can someone tell me, hopefully someone familiar with law, what exactly is the legal definition of consideration? Is there a federal definition of the word Consideration listed somewhere? Is it specifically the amount given in exchange for an item?

[HHM]

Instead of asking for the general definition, which may or may not be helpful, what is the specific thing you are concerned about.

In a nutshell, the consideration is the thing of value that is exchanged by the various parties to a contract. Note, the "thing" does not have to be tangible, it can simply be a promise.

A basic example, for a home purchase, the seller's consideration is the house, the buyers consideration is the money.

In a credit card agreement, the lenders consideration is the promise to make funds (i.e. the credit) available on demand, the borrowers consideration is the promise to pay back those funds.

[gettingby]

I'm specifically referring to consideration in relation to a credit card debt purchased by an assignee.

In an action on any assignment of a writing, the consideration for the assignment shall be averred. The Plaintiff shall recover no more than the consideration actually paid by him for the note or assignment.

[HHM]

ok...and???? What is the context?

[gettingby]

I'm reading this as to believe that the assignee can only collect on what they actually paid for the note or assignment, even if they paid a less amount than what the original amount of the note was valued. And that they aver the amount paid for the note or writing. I'm trying to ascertain if the law above would force the assignee to only be able to collect on the amount actually paid for the note or writing and not for the actual value of the original note or writing. Let me know if you need any more clarification.

[HHM]

Ok...

1. Who are you in relation to this clause
2. From what document and/or statute is this clause contained
3. Who are the contracting parties.

My first impression was that the clause relates to a dispute between the assignee and the assignor and has nothing to do with the "debtor", i.e. if there is a dispute between the assignee and the assignor, the assignee can only recover from the assignor what they paid for the account. But, without more context, I can't really say?

And generally, it would not make any sense that an assignee of a note can only collect from the debtor what they (the assignee) paid the assignor...people can freely assign various rights to others without limitation. Thus, I believe, if you are thinking you can use this clause as a defense to a debt buyer, you are probably out of luck.

[gettingby]

I am Defendant in civil litigation with Plaintiff being assignee of the original account holder.

The statute is under Kentucky Contract Law > Formality and Assignability of Contracts, specifically, KRS 371.050 (PDF)

I understand your reasoning, but this statute doesn't specifically exclude a debtor from using this statute as a defense. The action brought was on an assignment of a writing and

The plaintiff shall recover no more than the consideration actually paid by him
for the note or assignment.

I'm not trying to be hard-headed. I'm just trying to understand why this statute can't be used as a defense against assignee. When the assignee purchased and assumed control of the account, they essentially entered into the contract with me. When they sued on this assignment, they essentially fall under this statute. I am just exploring my options here.

And generally, it would not make any sense that an assignee of a note can only collect from the debtor what they (the assignee) paid the assignor...people can freely assign various rights to others without limitation.

I do understand your argument there, but if the law limits those rights by statute, does the assignee not take the chance, as stated in the above statute that they can only collect for the amount paid? The statute really seems to leave this open for review.

[HHM]

they essentially entered into the contract with me.

No contract exists between you and the debt buyer...the debt buyer merely bought the rights from the original lender (which they can do) and stands in place of the original lender...thus, the only contractual defenses you can raise are ones that you might raise against the original creditor. The real issue is whether the debt buyer has enough evidence in their possession to prove such an agreement exists between you and the creditor (often times a debt buyer has a hard time proving that fact).

That assumption is where your reasoning breaks down. Also, looking into the statute, you really need to look at the statute in CONTEXT of the chapter in which it exists. Chapter 371 of the KRS has to do with what is called the "statute of frauds". That legal concept is merely part of a state's code that outlines what types of contracts "must" be in writing in order to be enforceable.

As suspected, this clause is ONLY applicable to a dispute between the assignee and the assignor. Keep in mind, aver only means allege...all this statute is saying that in any action by the assignee to recover from the assignor, the assignee must, in their complaint, allege what consideration was paid for the assignment and are limited to only recovering that assignment.

Nice try, I wish you luck, but I think you are WAY off base on this one

[gettingby]

I stand corrected HHM. And thank you for taking the time to explain the fact. I believe I may have come upon some other options worth exploring that look a little more promising.