Devoted to Corporate Attorneys, Corporate Lawyers, and Corporate Counsel

The following is provided for information purposes, and not meant to be legal advice.

Instead of stating that equipment, services, or materials are given away for free, sometimes an agreement such as a bill of sale may indicate that the consideration is one dollar.  Is a party really required to pay the one dollar?

Technically, it appears to be a good idea to collect the one dollar for contract validity and enforceability.  However, though nonpayment constitutes a breach, there has been case law that nominal consideration is generally irrelevant to the purpose of a contract.

For example, in Bennett v. American Electric Power Service Corp., 2001 WL 1136150 (Ct. App., Ohio, 2001), the appeals court held that a contract was valid though a party failed to pay a one dollar consideration.  Nominal consideration is generally not relevant to whether a contract was formed clearly and properly especially when there is other consideration.