If the requirement of consideration is met, there is no additional requirement of a gain, advantage, or benefit to the promisor or of a loss, disadvantage, or detriment to the promisee.
(Code 1933, § 20-302.1, enacted by Ga. L. 1981, p. 876, § 2.)
Law reviews.- For article discussing third party beneficiary contracts, see 4 Ga. B.J. 19 (1941). For article, "Considering the Consideration Approach to Classifying Georgia Contracts In Partial Restraint of Trade," see 10 Ga. St. B.J. 18 (No. 2, 2004).
JUDICIAL DECISIONS
Editor's notes.
- In light of the similarity of the provisions, decisions decided prior to Ga. L. 1981, p. 876, which changed the definition of consideration, are included in the annotations for this Code section.
It matters not from whom consideration flows or that consideration may flow to third party. Mason v. Blayton, 119 Ga. App. 203, 166 S.E.2d 601 (1969) (decided prior to the passage of Ga. L. 1981, p. 876).
Consideration of contract need not flow from promisee, but may consist in promise or undertaking of one or more third persons. Steadwell v. Morris, 61 Ga. 97 (1879); Bell v. Sappington, 111 Ga. 391, 36 S.E. 780 (1900); Bing v. Bank of Kingston, 5 Ga. App. 578, 63 S.E. 652 (1909) (decided prior to the passage of Ga. L. 1981, p. 876).
Contract may be supported by adequate consideration although promisor never receives any of the consideration. Fine v. Haas, 120 Ga. App. 524, 171 S.E.2d 372 (1969) (decided prior to the passage of Ga. L. 1981, p. 876).
Promisee of note may maintain action although consideration furnished by third party.
- When in suit on note it appears that there was consideration to defendant endorser, fact that the consideration was furnished by one other than promisee does not prevent promisee from maintaining suit on such note. Edgar v. Edgar Casket Co., 125 Ga. App. 389, 187 S.E.2d 925 (1972) (decided prior to the passage of Ga. L. 1981, p. 876).
Whether admittedly adequate consideration was supplied by promisee or another is irrelevant.
- It is no legitimate concern of plaintiff whether consideration, which admittedly was adequate and has been paid, was supplied by grantee at considerable cost to grantee or was donated to grantee by a friend without cost. Inquiry on this point need go no further than to disclose that grantee obligated itself to supply consideration which was valuable and adequate, and that grantee did in fact discharge that obligation by supplying consideration promised. Archer v. Kelley, 194 Ga. 117, 21 S.E.2d 51 (1942) (decided prior to the passage of Ga. L. 1981, p. 876).
Consideration supplied by husband supports deed made to wife.
- When husband furnishes consideration for deed to be made to himself, but directed that deed be made to his wife, consideration furnished by him would support conveyance to his wife, as if conveyance had been made to him and by him to his wife. Read v. Gould, 139 Ga. 499, 77 S.E. 642 (1913) (decided prior to the passage of Ga. L. 1981, p. 876).
Transfer of chattel mortgage from mortgagee to mortgagor for consideration from nonparty passes title.
- Transfer of chattel mortgage from mortgagee to one of mortgagors, based on valuable consideration flowing from one not party to transaction, passes title to interest of such mortgagee into mortgagor named in transfer. Nolley v. Elliott, 50 Ga. App. 382, 178 S.E. 309 (1935) (decided prior to the passage of Ga. L. 1981, p. 876).
Promise made for purpose of benefiting third party, enforceable by latter.
- When promise is made for purpose of conferring benefit upon one not party to contract, and not furnishing consideration for the promise, one can bring suit upon the contract. Carruth v. Aetna Life Ins. Co., 157 Ga. 608, 122 S.E. 226 (1924) (decided prior to the passage of Ga. L. 1981, p. 876).
Fact of payment of group insurance premiums by employer, not rendering policy unenforceable by employee.
- Fact that plaintiff holder of certificate of group insurance did not pay any premiums on this insurance, but that certificate was issued to plaintiff by plaintiff's employer because of plaintiff's employment, and premiums were paid by plaintiff's employer, and fact that certificate depended upon master policy between his employer and insurer, would not render insurance not binding upon insurer. Liner v. Travelers Ins. Co., 50 Ga. App. 643, 180 S.E. 383 (1935) (decided prior to the passage of Ga. L. 1981, p. 876).
Note given by father for relinquishment of disputed claim against son is enforceable.
- While promise by father to assume unenforceable obligation against his minor son is unenforceable, and while promissory note cannot be enforced when the note is executed to pay existing debt of another and such assumption is supported by no legal consideration, a note voluntarily given by father in liquidation of disputed, and perhaps valid, claim against his son, is not without consideration where promisee relinquishes his bona fide claim against son, and surrenders evidence thereof. Gibson v. Kyle, 46 Ga. App. 295, 167 S.E. 547 (1932) (decided prior to the passage of Ga. L. 1981, p. 876).
When contract benefits public, member of public injured by contracting party's negligence may sue directly.
- Contract between state highway department and construction company by which latter undertakes to provide for safety of public during construction of project inures to benefit of public, and member of public injured as a result of negligence in failing to do so may sue contracting party directly. Lee v. Petty, 133 Ga. App. 201, 210 S.E.2d 383 (1974) (decided prior to the passage of Ga. L. 1981, p. 876).
Remote grantee of mortgaged property agreeing to pay debt incurs personal liability to mortgagee.
- Remote grantee of mortgaged property, who takes by deed in which one agrees to pay a debt, is personally liable to mortgagee where intermediate grantor took only subject to the debt and was not personally liable for the debt. Somers v. Avant, 244 Ga. 460, 261 S.E.2d 334 (1979) (decided prior to the passage of Ga. L. 1981, p. 876).
Promise of one to pay another's debts not authorization to latter's creditors to enforce.
- When one, for valuable consideration, agrees with another to pay latter's debts, this alone does not authorize creditor of promisee to bring action at law against promisor to recover debt. Sheppard v. Bridges, 137 Ga. 615, 74 S.E. 245 (1912) (decided prior to the passage of Ga. L. 1981, p. 876).
When promisor merely assumes to pay another's debt to third person, latter cannot enforce.
- When third person is not named as promisee, and where no trust is created in that person's favor, but another promisor, merely assumes to pay debt of another to such third person, latter cannot maintain action thereon. Hawkins v. Central of Ga. Ry., 119 Ga. 159, 46 S.E. 82 (1903) (decided prior to the passage of Ga. L. 1981, p. 876).
Wife of promisee, merely beneficiary and utter stranger to contract, could not maintain suit in one's own name. Waxelbaum v. Waxelbaum, 54 Ga. App. 823, 189 S.E. 283 (1936) (decided prior to the passage of Ga. L. 1981, p. 876). But see § 9-2-20.
Compromise on conflicting claims.
- If parties have conflicting claims, depending upon a law point, and the parties compromise those claims, each is bound by the settlement, whether the law point turns out to have been in one party's favor or not. Capitol Materials, Inc. v. Kellogg & Kimsey, Inc., 242 Ga. App. 584, 530 S.E.2d 488 (2000).
Consideration other than money.
- Order of the trial court dismissing the plaintiff's complaint with prejudice was reversed because the plaintiff's allegations that the plaintiff agreed to oversee the renovation and rehabilitation of certain real property in which the defendant had an interest in exchange for the defendant's promise to reimburse for certain budgeted expenditures were sufficient allegations to at least state a claim for breach of an oral contract and consideration could be something other than money. Campbell v. Ailion, 338 Ga. App. 382, 790 S.E.2d 68 (2016).
Injured party generally cannot sue tort-feasor's insurer directly due to lack of privity.
- Absent policy provisions to contrary, one who suffers injury is not in privity of contract with insurer under liability insurance policy and cannot reach proceeds of policy for payment of one's claim by action directly against insurer. Lee v. Petty, 133 Ga. App. 201, 210 S.E.2d 383 (1974) (decided prior to the passage of Ga. L. 1981, p. 876).
Cited in Gunter v. Mooney, 72 Ga. 205 (1883); Lee v. Exchange Nat'l Bank, 31 Ga. App. 470, 120 S.E. 694 (1923); Worsham v. Penn, 32 Ga. App. 189, 122 S.E. 817 (1924); Knight Co. v. Calhoun, 33 Ga. App. 312, 125 S.E. 790 (1924); Hall v. Wingate, 159 Ga. 630, 126 S.E. 796 (1924); Benton v. Roberts, 41 Ga. App. 189, 152 S.E. 141 (1930); Ray v. McCurdy, 171 Ga. 554, 156 S.E. 232 (1930); First Nat'l Bank & Trust Co. v. Roberts, 187 Ga. 472, 1 S.E.2d 12 (1939); Knight v. Wingate, 205 Ga. 133, 52 S.E.2d 604 (1949); Franklin v. Pope, 81 Ga. App. 729, 59 S.E.2d 726 (1950); Simonton Constr. Co. v. Pope, 213 Ga. 360, 99 S.E.2d 216 (1957); Carroll v. First Nat'l Bank, 106 Ga. App. 794, 128 S.E.2d 344 (1962); Utzman v. Caribbean & S.E. Dev. Corp., 107 Ga. App. 56, 129 S.E.2d 62 (1962); Murray v. Life Ins. Co., 107 Ga. App. 545, 130 S.E.2d 767 (1963); Potts v. Levin, 113 Ga. App. 4, 147 S.E.2d 1 (1966); McWhirter Material Handling Co. v. Georgia Paper Stock Co., 118 Ga. App. 582, 164 S.E.2d 852 (1968); Knight v. Lowery, 124 Ga. App. 172, 183 S.E.2d 221 (1971); Fidelity & Deposit Co. v. Gainesville Iron Works, Inc., 125 Ga. App. 829, 189 S.E.2d 130 (1972); Clarke v. Fanning, 127 Ga. App. 86, 192 S.E.2d 565 (1972); Continental Cas. Co. v. Continental Rent-A-Car of Ga., Inc., 349 F. Supp. 666 (N.D. Ga. 1972); McCrackin v. Clay, 151 Ga. App. 744, 261 S.E.2d 471 (1979).
RESEARCH REFERENCES
ALR.
- Services by one spouse to other as consideration for latter's promise, 73 A.L.R. 1518.
Implied obligation of one to pay for services or goods which another at his request has rendered or furnished to a third person, 125 A.L.R. 1428.
Contract to induce promise to enter into contractual or other relations with third person as enforceable by latter, his creditors or representatives, 129 A.L.R. 172.