Consideration in Contract Law

Consideration in Contract Law

• Consideration is crucial for enforcing promises in contracts. A plaintiff must show either a sealed document or consideration to initiate a lawsuit against a defendant based on a promise.
• Currie v. Misa (1875) defines consideration as a benefit accruing to one party or a detriment, loss, or responsibility taken on by the other.
• Essentially, consideration is the price paid for the defendant's promise. The plaintiff must demonstrate they gave something in exchange (an act or a promise).
• This benefit to the defendant can be conferred directly or indirectly (on someone else at the defendant's request).

Rules Governing Consideration

• Sufficiency, not Adequacy: Consideration must be real and valuable, but it doesn't have to be equal in value to the promise.
• Real Value: Worthless or unreal consideration is insufficient. The fact the exchange is unequal (in terms of market value) does not make the consideration invalid.
• Example: A promise to sell a car for a very small sum (e.g., N1) is still sufficient consideration, regardless of the obvious inadequacy.
• Thomas v. Thomas (1842): This case illustrates sufficiency. A widow could live in a house in exchange for paying £1 annually. This was considered good consideration, binding the executor to honour the agreement, even stemming from the husband's wishes.