"$20 and other good and valuable consideration"

Why does my deed say that the purchase price is “$20 and other good and valuable consideration”? The purchase agreement says $100,000!

This is a frequent point of confusion among landowners. They see $20 and they’re understandably worried that someone is trying to rip them off. But the truth is, this is a fairly common formulation.

Legally speaking, for a contract to be valid and enforceable, there must be what’s called “consideration.” Consideration, in essence, is some kind of mutual exchange of benefit, such as money for services, property for money, or promises for reciprocal promises. If a contract lacks consideration, it may be unenforceable.

In general, good contractual drafting entails making sure that the consideration is evident from the plain language of the contract. (You never want the judge or jury to have to dig into the circumstances surrounding the contract to determine if it is valid…). So most contracts will specify, e.g., the amount of money that is changing hands. That is why Purchase and Sale Agreements typically state exact dollar amounts, such as $100,000 or $10,000 per acre.

But deeds aren’t just contracts, they are also public records. And because they’re public records, anyone is entitled to see them. For that reason, most people aren’t comfortable stating publicly the amount they’ve paid for a property.

So the practice has developed of stating that the property is being sold for some nominal amount (e.g., $20) and “other good and valuable consideration.” Courts understand that the “other good and valuable consideration” is specified elsewhere and greatly exceeds the nominal sum of money. Therefore, they are willing to enforce the contract on its plain language, but the parties can keep the total amount in the Purchase and Sale Agreement, and therefore, keep it private.

Simply put, the “other good and valuable consideration” is the amount of money specified in your Purchase and Sale Agreement.