Give examples of consideration which are - Sufficient but not adequate; and Not sufficient nor adequate

Home, - Give examples of consideration

Question - a) Consideration must be sufficient but does not have to be adequate. What does this mean?

Answer - A good consideration must have some value in the eyes of law. In other words, Consideration must have some value but not necessarily be in proportionate to the value the promisor has made as promise to the promise made by promisee. Court does not have concern for the adequacy of consideration however the court does check if consideration is sufficient or at least there is some consideration given (Australia Contract law, 2021, pg.1(2)). In other words, consideration is good to aid the contract under common law which can further be nominal and sufficient containing a legal value.Additionally, consideration should not be immoral or against the policy of public. Moreover, court only seeks the contract as free freely entered between parties but not as role to determine if the adequate value has been provided. In the case of Chappell & Co LTD V Nestle Co Ltd, the wrappers of chocolate were of very less valuable for buyer and also thrown away by seller but there is still a special consideration involved as promisor has special value to it and can support the contract. In the case traditional doctrine was considered as consideration is sufficient but not required to be adequate.

b) Can you give examples of consideration which are - Sufficient but not adequate; and Not sufficient nor adequate.

Answer - Consideration need not be adequate but must attach a value to the parties decided the value of consideration. Adequate consideration demand a contract to be at fair value and sufficient consider the value as factor which may or may not be fair.

Example of consideration which is neither sufficient nor adequate

Consideration needs to be consisting of some profit, right, or benefit which is resulting in some loss, detriment, forbearance or responsibility undertaken or suffered by other party. In the case ofSidway v Harmer 1891124 NY 538, uncle promised to pay his nephew $5000 if he refrain drinking of liquor, stop smoking and playing cards for the return of money till nephew turns 21. Court considered that there is no consideration involved as the uncle is not getting any benefit from the performance of nephew and nephew is arguably not receiving any detriment(Chamberlians, 2021, pg.1(2)).

Example of consideration which is sufficient but not adequates

Mack promised to pay $5500 in exchange of Tom's car. The market value of the car appears as $8500 and thus the promised amount is much less than market value. However, there is still some value and is considered as sufficient but not adequate. The consideration is present and therefore the contract is enforceable.

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