Question:

Why does my separation agreement say “in consideration of the sum of ONE DOLLAR ($1.00), to each of the parties in hand paid by the other, the receipt whereof is hereby acknowledged”?

Answer:

Mere promises are not enforceable by the court.  The court requires something more to have an enforceable contract.  Each party must give something of value to the other.  That is called consideration.

The consideration may be nominal.  “A rose, a hawk, or a peppercorn will suffice.”   Williston on Contracts.

Modern lawyers, many of whom may not even know what a peppercorn is or where to find one, have found it more convenient to make one dollar the consideration.

“I promise to send you 30 pounds a month,” said Mr. Balfour to his wife,  before he set sail for Ceylon (now Sri Lanka) on assignment as an English civil engineer in the early 1900’s.  Mrs Balfour’s doctor said that she should stay in England for her health rather than return to the jungle climate of Ceylon.

“I think it is better that we stay separated,” wrote Mr. Balfour, and he stopped the payments.  Mrs. Balfour obtained a divorce and alimony.  In addition, she sued him for breach of contract for the 30 pounds a month he had promised her.

The lower court held that Mr. Balfour had to continue to pay her as agreed.  The Court of Appeal unanimously reversed, finding that there was no agreement enforceable in law.

Although the judges’ reasons differed, the heart of their analysis was that married couples make agreements all the time, to pay an allowance, for example.  The court said that not all domestic agreements rise to the level of a contract enforceable by law.  Balfour v Balfour [1919] 2 KB 571