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Consideration doesn't have to be denominated in dollars.





Consideration can be as minimal as "your continued employment with this company." It does not have to be any sort of additional dollar amount.

I thought continued employment was the textbook example of not being consideration which is why a company can't say they fired you with cause for not signing an NDA that was presented to you after you had already been working there

Edit:googled some more and it appears that continued employment as sufficient consideration is different on a state by state basis and isn't firmly set in stone yet


"We won't sue you", however, is not consideration.

It is, especially (but not necessarily) if the person promising not to sue has a valid claim. This is covered in any contract law textbook, but it's an old common law principle so there are plenty of free online sources, too. For example, in the US, see Bennett, 'Forbearance to Sue' (1898) 10(2) Harvard Law Review 113–118 [1]; in the UK, see Kelly, 'Forbearance to Sue and Forbearance to Defend' (1964) 27(5) Modern Law Review 540–545 [2].

[1] http://www.jstor.org/stable/1321438

[2] http://onlinelibrary.wiley.com/doi/10.1111/j.1468-2230.1964....


I wouldn't be so sure - for example, out of court settlements pretty much amount to "We'll pay you $x without admitting that we ever did something wrong, and you agree not to sue us over that thing that we totally did not do.", and these definitely are valid contracts.

Obtaining an opposing party's waiver of their right to pursue legal remedies is not the same thing as obtaining non-binding indication that they may not pursue you legally.

In the first case you have extinguished a right that could be used against you. In the second case you have obtained nothing more than the illusion of safety.


Not suing in that case is the terms of the contract. The consideration is $x for party A and for party B it's not having to admit wrongdoing. Had the NDA in question given William $x to not disclose the security hole then he would certainly would be in breach of contract. But the NDA gave him nothing.

When they were drafting the "contract", the concept of consideration was very interesting. I had considered that if I would receive cash for agreeing to not disclose then this would be blackmail which apparently is bad.



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