If you have ever reviewed a Texas deed, whether it’s a General Warranty Deed or a Special Warranty Deed, you likely noticed a peculiar phrase regarding the purchase price. Instead of seeing the actual sales price (such as $350,000), the document likely states the property was sold for "$10.00 and other good and valuable consideration." This tradition often leads clients to wonder if the document is a misrepresentation or if the deed is legally valid because ten dollars may have never actually changed hands. Understanding this legal shorthand is essential for anyone navigating Texas real estate transactions.
Nominal Consideration and Privacy
In Texas, the primary reason for using the "$10 and other valuable consideration" language is privacy. Because deeds are recorded in public property records, many buyers and sellers prefer not to disclose the exact financial details of their transaction to the general public.
The phrase "other good and valuable consideration" is a legal catch-all that represents the actual purchase price, the payoff of an existing loan, or other terms agreed upon in the private sales contract. While modern digital forms sometimes omit the "ten dollars" and simply refer to "valuable consideration," the tradition persists as a way to satisfy the legal requirements of a contract without turning a public deed into a public receipt.
The Legal Requirement of Consideration
Under Texas contract law, a deed must be supported by consideration to be valid. Consideration is essentially the value given in exchange for the property.
However, Texas courts have long held that the recital of consideration in a deed is sufficient to pass title, even if the nominal amount listed (like $10.00) is never physically handed over. This is rooted in a deep history of Texas case law. Texas courts have held that as long as there is an intent to convey the property and some form of valuable consideration exists behind the scenes, the deed is legally binding.
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