The second integral element of consideration is that it must sufficient and not necessarily adequate. For example if a house worth £500,000 was sold for £100,000, the consideration was clearly inadequate, but it was sufficient in the eyes of the law. In Thomas V Thomas [1842] 2 QB 851, a widow who was promised a house by her late husband had in return promised to pay £1 a year in rent and to keep the house in good decorative order. The payment of £1 a year rent, although inadequate, was still considered sufficient a therefore constituted good consideration. (Adapted from Contract Law, J. Poole)
The above examples are just a few of the criteria which must be present in good consideration. There are many other factors which need to be present on order for consideration to be deemed good.
Consideration need not be made in monetary terms, or indeed be tangible. In one Canadian case, namely Hubbs V Black 1918, it was found that agreeing not to take a certain plot in a cemetery constituted good consideration. (Adapted from )
There are many reasons whereby the doctrine of consideration in the English legal system can be considered a positive entity and many reasons why it can be thought of as a negative entity. In many aspects, I agree with Lord Goff’s view that English contract law is in many ways deficient due to the doctrine of consideration. One way in which the doctrine hinders the legal process involved in contract cases is that there are many elements which must all be present in the concept of consideration in order for the contract to be enforceable. This complexity creates a very long winded process for barristers, solicitors and judges. It also creates a problem for non legally educated people who wish to enter into a contract without the consultation of a solicitor because although in their eyes they have the security of a contract, they may not actually be shielded by it.
It seems apparent that consideration is almost unique to English contract law and is not given such high priority in contract law in many other nations. The American legal system makes little use of the doctrine of consideration and is often commended on its contractual aspect. They rely heavily on technicalities and intention to create legal relations. This approach makes the whole aspect of contract law much more comprehensible to lay (non-legally educated) people. It also allows people who have entered into a contract much more aware of their legal stance, as the concept of intention to create legal relations is much simpler to understand than the concept of consideration.
Another problem with the doctrine is that it does not take into account the factor of morality. In cases regarding breach of contract it is not rare that the judges’ prerogative does not take into account moral arguments. This in turn brings about other doctrines, such as the doctrine of restitution, which causes English contract law to become further complicated. A good example of immorality in a breach of contract judgement is in the case of Jones V Padavatton [1969] 2 All ER 616, [1969] 1 WLR 328. In this case, a mother had promised to pay for her daughter to leave her job in the Indian Embassy in Washington D.C., America and study law in England. Following this, she promised to provide a house for her daughter (part of which was to be rented out). Soon after, she ceased paying the daughter and told her daughter to rely upon the income from the rental of the house. The house, however, was not furnished because the daughter had no money to provide furniture and therefore found it hard to find tenants. The Judge ruled that the mother may take possession of the house, thus leaving the daughter homeless, and unemployed. In my opinion this is very immoral because the daughter is now left destitute due to her mother.
There are, however, benefits of having this doctrine in English contract law. It prevents the enforcement of contracts against parties who were not aware that they had entered into a legally binding contract, as consideration must move from the promisee to the promisor, this represents that the promisee knows that a contract is in force as they are offering something in return. This prevents the English law courts being inundated by breach of contract cases which in many cases are for trivial reasons.
The doctrine of consideration also gives a ‘badge of enforceability’ to a contract. This, essentially, means that both parties to a contract will know that the contract exists and is legally binding, and therefore enforceable. Much like the above statement, it indemnifies one party of foul play should they be accused of creating a contract without the knowledge of the other party.
Consideration in a contractual meaning also prevents the United Kingdom developing too much of a ‘compensation culture’ the results of which can be seen in the United States of America. I would like to bring reference to the case where several American people sued fast food chains because they contributed to the plaintiff’s obesity. Although this is not directly related to the law of contract, this manner of futile court cases stems from the law of contract.
In summation, I believe that having the doctrine of consideration in the English legal system is a positive thing. Consideration provides the court with a clear view as to whether a contract was intentionally formed by both parties. This helps maintain the integrity of our legal system and helps to keep the system just. Although it may be a difficult concept for some people to understand, and often unheard of by those without legal education, it is still a very helpful doctrine. As with all things in this world, consideration has its positive aspects and its negative aspects, but in my opinion the positives outweigh the negatives. Therefore, I feel that although Lord Goff’s perception of the doctrine of consideration is that it is unnecessary, I, on the other hand, feel that it is an integral pillar of the structure that is the English legal system.
Bibliography
Textbook on Contract Law – Jill Poole
Oxford Dictionary of Law
Cases and Materials on the English Legal System – Michael Zander
