# What Is the Legal Concept of 'Past Consideration'? ▴ Learn

**Published:** 2025-11-09
**Categories:** Learn

---

## What Is the Legal Concept of ‘Past Consideration’?

Past consideration is an act that was performed before the contract was formed. Legally, past consideration is not considered valid consideration because it was not bargained for in the current exchange.

For a contract to be valid, the consideration must be given at the time the contract is made or in the future.

Are Smart Contracts Legally Binding?

What Is the Legal Status of a Smart Contract in Major Jurisdictions?

Can a Smart Contract Be Legally Binding in All Jurisdictions?

What Is ‘Consideration’ in Contract Law?

## Discover More

- 
### [What Is the Concept of “Finality” in a Blockchain and How Does PoW Achieve It?](https://crypto.greeks.live/learn/what-is-the-concept-of-finality-in-a-blockchain-and-how-does-pow-achieve-it/)
![The close-up reveals precision-machined metallic layers and a central spindle suggesting immutable data structures foundational to blockchain ledger persistence. Concentric rings and small apertures evoke synchronized block propagation and the critical timing inherent in decentralized finance DeFi derivatives pricing models. This visual metaphor represents the mechanical latency juxtaposed against instantaneous digital settlement required for optimized limit order book execution and efficient atomic swaps utilizing sophisticated layer two scaling solutions. The dark, high-contrast environment emphasizes the high-stakes nature of on-chain governance voting requiring robust security protocols against reentrancy attacks and oracle manipulation within complex synthetic asset protocols.](https://crypto.greeks.live/wp-content/uploads/2025/10/Macro-Photography-of-Hard-Disk-Platter-Spindle-Assembly-Symbolizing-On-Chain-Settlement-Latency.jpg)

Finality is the guarantee a transaction cannot be reversed. PoW achieves it probabilistically as the cost of reversing increases with each new block added.

- 
### [How Is ‘Consideration’ Typically Represented in a Smart Contract?](https://crypto.greeks.live/learn/how-is-consideration-typically-represented-in-a-smart-contract/)
![This highly polished metallic apparatus, featuring intersecting, brushed metal arms mounted over a circular base with three dark actuator buttons, conceptually mirrors the rigorous engineering required for robust Decentralized Finance DeFi protocol construction. The orthogonal alignment signifies strike price symmetry intrinsic to zero-strike options structures or a perfect delta-neutral portfolio hedge execution. The central hub, possibly representing a staking mechanism or oracle feed integration, suggests the trustless settlement layer underpinning complex smart contract arbitrage strategies. This visual lexicon invokes concepts like immutability constraints, non-fungible token NFT fractionalization governance, and the precise calibration of liquidity pool parameters essential for minimizing slippage in high-frequency crypto trading environments where latency is paramount.](https://crypto.greeks.live/wp-content/uploads/2025/10/Precision-Machining-Metaphor-for-Blockchain-Governance-Consensus-Mechanism-Implementation.jpg)

Consideration is represented by the automatic, coded transfer of cryptocurrency or tokens upon condition fulfillment.

- 
### [What Is the Concept of ‘In the Money’ (ITM) in Options Trading?](https://crypto.greeks.live/learn/what-is-the-concept-of-in-the-money-itm-in-options-trading/)
![Two highly reflective platters suggestive of magnetic storage media or stacked digital ledger layers exhibit a subtle cyanic sheen against deep null space. A meticulously engineered electromechanical arm featuring a bright blue housing and polished metal shafts pivots across the surfaces, mimicking the precise movement of a high-frequency trading algorithm accessing latent data structures. This configuration conceptually models the complex mechanics of collateralized debt positions or synthetic asset creation within decentralized finance DeFi protocols, particularly the atomic execution of options expiration settling against immutable on-chain record keeping. The alignment precision required mirrors the strict parameters governing smart contract execution for complex perpetual swap derivatives settlement or flash loan arbitrage opportunities, emphasizing deterministic finality over volatile market microstructure noise. This visual juxtaposition speaks to the underlying physical precision required to manage digital financial abstractions like synthetic token collateralization ratios.](https://crypto.greeks.live/wp-content/uploads/2025/10/Precision-Actuator-Mechanism-Interfacing-with-Overlapping-High-Density-Data-Substrates-Representing-Tokenized-Asset-Stratification.jpg)

An option is ITM if its immediate exercise would yield a profit (Call: Asset Price > Strike; Put: Asset Price < Strike).

- 
### [Explain the Concept of Margin Trading in Crypto Derivatives](https://crypto.greeks.live/learn/explain-the-concept-of-margin-trading-in-crypto-derivatives/)
![Two elongated, tapering forms, one pale beige and one cyan-tinted translucent plane, intersect over a segmented, dark metallic structure suggesting underlying infrastructure or hardware. This visual dynamic represents the critical moment of derivative pricing discovery where implied volatility surfaces meet realized price action in decentralized finance. The intersection symbolizes the precise execution point of complex financial contracts like perpetual swaps or cash-settled futures contracts managed by smart contract logic. It mirrors the delicate equilibrium between bid-ask spreads and deep liquidity pool depth essential for successful arbitrage strategies across various centralized and decentralized exchanges DEXs. The underlying structure evokes hardware security modules HSMs or cold storage ledger integrity safeguarding digital asset custody during high-frequency trading HFT maneuvers. Understanding this nexus is key to mastering gamma scalping and managing systematic risk exposure in leveraged crypto options.](https://crypto.greeks.live/wp-content/uploads/2025/10/Crossover-Point-Intersection-of-Volatility-Skew-and-Algorithmic-Trading-Execution-on-Decoupled-Digital-Asset-Ledger.jpg)

Using borrowed funds (leverage) with a small collateral (margin) to open larger derivative positions, magnifying outcomes.

- 
### [How Does the Concept of “Non-Custodial” Apply to Dapps?](https://crypto.greeks.live/learn/how-does-the-concept-of-non-custodial-apply-to-dapps/)
![The stark monochromatic background isolates a beige, smoothly curved spherical object from which a complex metallic armature, resembling a precision instrument or deployment tool, extends. This projection mechanism, comprised of sharply angled, dark grey planes and thin cantilevered extensions, suggests a highly structured extraction process or perhaps the execution of a complex option strategy payout structure. The assembly evokes concepts of cold storage key retrieval or the settlement process for on chain perpetual futures where precision dictates the final realized PnL. This visual metaphor speaks to the intricate engineering behind decentralized finance primitives, mirroring the delicate calibration required for dynamic hedging ratios or managing synthetic asset exposure within a multi-asset collateral pool, emphasizing cryptographic integrity during atomic swaps or oracle data feeds impacting options pricing models like Black Scholes adjustments under extreme market conditions.](https://crypto.greeks.live/wp-content/uploads/2025/10/Asymmetric-Mechanism-Deployment-Extracting-Implied-Volatility-Data-From-Digital-Asset-Spherical-Node.jpg)

Users keep full control of their private keys and funds; the dApp never holds the assets directly.

- 
### [Explain the Concept of the “Volatility Smile” or “Volatility Skew”](https://crypto.greeks.live/learn/explain-the-concept-of-the-volatility-smile-or-volatility-skew/)
![Two interlocking spheres, bisected diagonally into textured teal and smooth dark grey quadrants, visually articulate the inherent symmetry and asymmetry within complex financial modeling. This abstract representation mirrors the interconnectedness of decentralized ledger technology and structured financial instruments. The distinct textures suggest varying levels of perceived risk premium and underlying asset sentiment, analogous to modeling the implied volatility surface across different strike prices for perpetual futures or options strategies. Such a construct encapsulates the non-linear payoff structures characteristic of delta hedging in high-frequency crypto arbitrage and the stochastic calculus applied to determining optimal exercise boundaries for exotic derivatives settlement against tokenized assets. The central nexus suggests crucial convergence points in margin requirements across cross-chain DeFi protocols managing synthetic asset exposure.](https://crypto.greeks.live/wp-content/uploads/2025/10/Bifurcated-Digital-Asset-Volatility-Surface-Modeling-Implied-Skew-Distribution-Dynamics.jpg)

The pattern where options with the same expiration but different strike prices have varying implied volatilities, contradicting Black-Scholes.

- 
### [What Is the Concept of ‘Network Effect’ in Cryptocurrency?](https://crypto.greeks.live/learn/what-is-the-concept-of-network-effect-in-cryptocurrency/)
![A highly polished, reflective planar structure intersects a textured, muted grey planetary body suggesting a stable base asset or settlement layer. Three distinct colored orbs teal blue and creamy white are precisely arrayed along an angled, filigreed gold-toned armature extending into black void, embodying complex derivatives pricing models. This visual architecture symbolizes the calibration of implied volatility surfaces across disparate systemic risk environments like decentralized autonomous organizations executing sophisticated option expiry strategies or complex structured product issuance relying on oracle feeds for accurate asset realization against collateralized debt positions. The arrangement mirrors the intricate balancing act required for maintaining delta-neutral exposure during high-slippage market microstructure events and achieving optimal strike selection in exotic derivatives valuation frameworks.](https://crypto.greeks.live/wp-content/uploads/2025/10/Celestial-Arbitrage-Mechanism-Modeling-Lunar-Surface-Proximity-Dynamics-for-Decentralized-Finance-Structuring.jpg)

The value of the network increases as the number of its users increases.

- 
### [How Does the Concept of “Time Decay” (Theta) in Options Relate to the Duration of a Rally?](https://crypto.greeks.live/learn/how-does-the-concept-of-time-decay-theta-in-options-relate-to-the-duration-of-a-rally/)
![The central structure exhibits perpendicular, glowing linear elements intersecting within a smooth, cyan-edged housing, symbolizing the convergence of market forces in complex instrument pricing. This visual metaphor captures the non-linear mechanics of structured products like exotic options embedded within DeFi protocols. Specifically, the intersecting light paths resemble the intrinsic value realization curve against varying underlying asset volatility, perhaps modeling a specific payoff diagram for a digital asset basket option. The sharp, illuminated tips suggest high-leverage points akin to delta hedging adjustments on a perpetual futures contract or the critical strike price evaluation for a knock-in barrier derivative. The dark background emphasizes the isolation of this financial mechanism, relevant to opaque on-chain liquidity pool dynamics and automated market maker slippage management in high-frequency trading environments.](https://crypto.greeks.live/wp-content/uploads/2025/10/Illuminated-Cross-Sectional-Analysis-of-Decentralized-Finance-Exotic-Option-Payoff-Structure.jpg)

Theta erodes an option's value over time; a prolonged bounce hurts short-term put buyers as time decay offsets potential price gains.

- 
### [Explain the Concept of Being “Out of the Money” for a Put Option](https://crypto.greeks.live/learn/explain-the-concept-of-being-out-of-the-money-for-a-put-option/)
![Stacked, cuboid components in muted sage green, deep slate blue, and beige suggest a composite digital asset structure. This assemblage models the compartmentalized nature of complex financial instruments, specifically referencing multi-leg option strategies integrated within decentralized autonomous organizations DAOs. The visible discrete units parallel segregated collateral pools or distinct tranches within synthetic asset creation. Observing the visual layering evokes concepts of structured products and stacked collateralization ratios necessary for maintaining solvency in perpetual futures markets. The recessed black aperture signifies a potential oracle feed integration or a dark pool liquidity node crucial for efficient crypto derivatives pricing mechanisms. This aesthetic speaks to robust DeFi infrastructure modeling required for sophisticated volatility hedging.](https://crypto.greeks.live/wp-content/uploads/2025/10/Modular-Architecture-of-Layered-Decentralized-Exchange-Asset-Structures-Comprising-Tiers.jpg)

A put option is OTM when the crypto's market price is higher than the strike price, meaning it has no intrinsic value.

---

## Raw Schema Data

```json
{
    "@context": "https://schema.org",
    "@type": "BreadcrumbList",
    "itemListElement": [
        {
            "@type": "ListItem",
            "position": 1,
            "name": "Home",
            "item": "https://crypto.greeks.live"
        },
        {
            "@type": "ListItem",
            "position": 2,
            "name": "Learn",
            "item": "https://crypto.greeks.live/learn/"
        },
        {
            "@type": "ListItem",
            "position": 3,
            "name": "What Is the Legal Concept of &#8216;Past Consideration&#8217;?",
            "item": "https://crypto.greeks.live/learn/what-is-the-legal-concept-of-past-consideration/"
        }
    ]
}
```

```json
{
    "@context": "https://schema.org",
    "@type": "Organization",
    "@id": "http://greeks.live#organization",
    "name": "Greeks.Live",
    "url": "http://greeks.live",
    "description": "About Greeks.live Greeks.live is a dedicated platform within the professional crypto trading ecosystem, powered by a proprietary Large Language Model (LLM) engine. Our mission is to provide traders with a decisive edge by synthesizing institutional-grade data, advanced analytics, and the foundational knowledge required to master them. The platform offers clear, data-driven analysis on key market areas, from options to RFQ trading. It serves as an extensive and dynamic repository of knowledge, answering critical questions and exploring complex trading strategies. While the information is LLM-generated and sourced from diverse, real-time market data, we urge traders to integrate these insights as one component of a comprehensive trading strategy. Greeks.live is designed as an advanced educational and analytical tool\u2014a foundation for building informed, data-driven trading decisions. Disclaimer The content on Greeks.live is generated using LLM technology and relies on publicly available market data. It is intended for informational and educational purposes and does not constitute financial advice. While we strive to provide accurate and reliable insights, the content may have inherent limitations in the fast-moving crypto market. All trading involves significant risk. We recommend cross-referencing with multiple sources and performing your own due diligence before making any financial decisions. Our Purpose Greeks.live is committed to fostering strategic proficiency, clarity, and transparency in the crypto options market through open access to institutional-grade tools and knowledge.",
    "email": "support@greeks.live",
    "logo": {
        "@type": "ImageObject",
        "url": "https://crypto.greeks.live/wp-content/uploads/2025/10/Greeks.Live-Logo-Icon.svg"
    },
    "hasPart": [
        {
            "@type": "WebSite",
            "name": "About Us",
            "url": "https://about.greeks.live"
        },
        {
            "@type": "WebSite",
            "name": "App Download Page",
            "url": "https://about.greeks.live/#/download/basic_trade"
        },
        {
            "@type": "WebSite",
            "name": "Newcomers' Guide",
            "url": "https://twisty-sign-c8b.notion.site/Guide-for-Greeks-live-X-Deribit-Newbies-5a08a3052822427d800af6eaf3704c8d"
        },
        {
            "@type": "WebSite",
            "name": "Knowledge Base",
            "url": "https://linktr.ee/greeks.live"
        },
        {
            "@type": "WebSite",
            "name": "Option Terminology",
            "url": "https://greekslive.notion.site/88dfc00e7c584d4d8969b6302a79a12f?pvs=4"
        },
        {
            "@type": "WebSite",
            "name": "Terms of Service",
            "url": "https://greeks.live/#/tos"
        },
        {
            "@type": "WebSite",
            "name": "Disclaimer",
            "url": "https://greeks.live/#/disclaimer"
        },
        {
            "@type": "WebSite",
            "name": "RFQ Newsfeed",
            "url": "https://rfq.greeks.live"
        },
        {
            "@type": "WebSite",
            "name": "Crypto Options Learning Directory",
            "url": "https://options.greeks.live"
        }
    ],
    "makesOffer": [
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "RFQ Crypto Platform",
                "url": "https://rfq.greeks.live",
                "description": "Execute institutional-grade block trades for crypto options and futures. This platform provides deep, over-the-counter (OTC) liquidity via a professional Request for Quote system.",
                "provider": {
                    "@id": "http://greeks.live#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Crypto Data Lab",
                "url": "https://greeks.live/#/deribit/tools/datalab/BTC",
                "description": "Analyze historical and real-time options data with advanced metrics. This tool is designed for backtesting strategies and identifying market trends through comprehensive data visualization.",
                "provider": {
                    "@id": "http://greeks.live#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Options Crypto Trading",
                "url": "https://greeks.live/",
                "description": "Join the official Greeks.live community. Connect with other traders, share insights, and receive the latest updates directly from the team.",
                "provider": {
                    "@id": "http://greeks.live#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Deribit Crypto Trading",
                "url": "http://deribit.greeks.live",
                "description": "A dedicated interface for trading on the Deribit exchange. This platform leverages Greeks.live's advanced analytics and tools specifically for users of Deribit's options and futures markets.",
                "provider": {
                    "@id": "http://greeks.live#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "OKX Crypto Trading",
                "url": "http://okx.greeks.live",
                "description": "A dedicated interface for trading on the OKX exchange. This platform integrates Greeks.live's powerful analytics with the OKX marketplace, focusing on its options and derivatives products.",
                "provider": {
                    "@id": "http://greeks.live#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "AI Crypto Trading Platform",
                "url": "https://www.glvs.ai/",
                "description": "A dedicated testnet environment for developers to test their API integrations and automated trading strategies. This sandbox allows for full functionality testing without risking real funds.",
                "provider": {
                    "@id": "http://greeks.live#organization"
                }
            }
        }
    ]
}
```

```json
{
    "@context": "https://schema.org",
    "@type": "Article",
    "mainEntityOfPage": {
        "@type": "WebPage",
        "@id": "https://crypto.greeks.live/learn/what-is-the-legal-concept-of-past-consideration/"
    },
    "headline": "What Is the Legal Concept of 'Past Consideration'? \u25b4 Learn",
    "description": "Past consideration is an act completed before the contract formation and is not legally valid for a new contract. \u25b4 Learn",
    "url": "https://crypto.greeks.live/learn/what-is-the-legal-concept-of-past-consideration/",
    "datePublished": "2025-11-09T03:30:21+00:00",
    "dateModified": "2025-11-09T03:30:21+00:00",
    "articleSection": [
        "Learn"
    ],
    "author": {
        "@id": "http://greeks.live#organization"
    },
    "publisher": {
        "@id": "http://greeks.live#organization"
    },
    "image": {
        "@type": "ImageObject",
        "url": "https://crypto.greeks.live/wp-content/uploads/2025/10/Crystalline-Structure-Modeling-Volatility-Surface-Pinwheel-Indicating-Derivative-Contract-Convergence-Mechanisms.jpg",
        "caption": "The visual showcases four highly polished, angular crystalline blades, colored pale blue and sharply pointed, radiating from a multifaceted central hub where they are secured by thin, horizontal gold-toned metallic rods. These blades extend over large, dark, smooth, quarter-circle shapes that reflect the central structure against a pure black background. This stylized formation abstractly models the mechanics of a dynamic options wheel, specifically illustrating the intricate calibration required for pricing path-dependent derivative products within decentralized exchanges. The sharp points reflect the defined expiry boundaries of futures contracts or the discrete payoff structures of Asian options referencing underlying volatile digital assets. The intersection hardware suggests the standardized collateral mechanisms or margin requirements essential for maintaining solvency across leverage protocols. Analyzing this geometry provides insight into structuring robust synthetic positions resistant to basis risk fluctuations prevalent in cross-chain liquidity provisioning and structured DeFi yield generation strategies, embodying precision in risk parameterization."
    },
    "keywords": [
        "Bargained for Exchange",
        "Binding Legal Agreement",
        "Blockchain Contract Law",
        "Blockchain Legal Analysis",
        "Blockchain Legal Definitions",
        "Clickwrap Agreements Blockchain",
        "Consideration in Contracts",
        "Consideration Requirement",
        "Contract Formation",
        "Contract Law Principles",
        "Contractual Elements",
        "Contractual Exchange",
        "Contractual Obligations",
        "Crypto Contractual Issues",
        "Digital Asset Contracts",
        "Digital Contract Formation",
        "Executed Consideration",
        "Future Consideration",
        "Legal Concept Definitions",
        "Legal Enforceability",
        "Legal Framework for Dapps",
        "Legal Implications of Code",
        "Legal Standing of Transactions",
        "Legal Status of Actions",
        "Legal Tech Concepts",
        "Legal Validity",
        "Mutual Assent Requirement",
        "Offer Acceptance Doctrine",
        "On Chain Legal Compliance",
        "Past Consideration",
        "Pre Contractual Acts",
        "Retroactive Agreements",
        "Smart Contract Functionality",
        "Smart Contract Governance",
        "Smart Contract Legality",
        "Smart Contract Validity",
        "Time of Contract Formation",
        "Understanding Contract Law",
        "Unsigned Digital Contracts",
        "Valid Consideration Definition"
    ]
}
```

```json
{
    "@context": "https://schema.org",
    "@type": "WebSite",
    "url": "https://crypto.greeks.live/",
    "potentialAction": {
        "@type": "SearchAction",
        "target": "https://crypto.greeks.live/?s=search_term_string",
        "query-input": "required name=search_term_string"
    }
}
```


---

**Original URL:** https://crypto.greeks.live/learn/what-is-the-legal-concept-of-past-consideration/
