A Contract Without Consideration?
A question I am asked frequently is how can a contract not have consideration in Puerto Rico. Due to our civilist tradition, contracts in Puerto Rico are defined as a personal obligation “to give, do, or not do”. This vague definition protects agreements that lack consideration. A free contract in our jurisdiction has as its purpose “the mere liberality of the contractors”.
The problems usually arise when U.S. based corporations conduct business in Puerto Rico. Perhaps as a precaution, contracts are assigned a nominal $1 to be able to qualify as a “contract” by common law standards. These companies should rest assured that even without consideration, a free contract is valid and enforceable in Puerto Rico.
Contracts, according to our standards, reflect the voluntary will to act and dispose of our present and future estate by consenting to another party to act or limit one’s own acts formally. Being this the first of three elements necessary to qualify a contract in Puerto Rico (consent, object and cause), anyone capable of legally acting can enter a contract that would entail no patrimonial reciprocity whatsoever.
So, the next time you see a “free contract” without any consideration in Puerto Rico, don’t worry over it. It’s still a valid contract…
