It has been said that a promise is enforceable once consideration has been provided. Discuss whether this statement is too simplistic as a description of the principle of consideration.

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Coursework for foundations

Contract – consideration

06/01/2010

“It has been said that a promise is enforceable once consideration has been provided. Discuss whether this statement is too simplistic as a description of the principle of consideration”.

One main feature of the English law that readily distinguishes it from the law of contract in civilian jurisdiction is the doctrine of consideration. The orthodox view is that consideration is about reciprocity or bargains. In order to enforce a promise a promise must have given something in return for the promise 1.

The rules that make up the doctrine of consideration can be set out in the form of three principal rules. The first is that consideration must be sufficient but it dose not need to be adequate. This rule can be further broken down into a number of sub-rules and has proved to be particularly problematic in the case where the consideration is alleged to take the form of a promise to perform or the performance of a pre-existing duty. The second rule is that past consideration is not good consideration and the third, is that consideration must move from the promisee 2.

The rule that consideration must be sufficient but it does not need to be adequate requires that something of value must be given in return for a promise but that something does not need to be an adequate return. The parties, and not the doctrine of consideration, are in general the arbiters of what constitutes a good or bad bargain. However, it dose not follow from the fact that the doctrine of consideration is not interested in the fairness of the bargain that the law of contract is simply disinterested. It is the parties or it is the courts who whether or not consideration is sufficient. It is useful to distinguish the case where the alleged consideration takes the form of a promise to pay money for a service or a product from the case where the promise takes the form of a promise to provide non-monetary benefits 3.

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In a case for example where a promise to pay £1 for a business does constitute the provision of sufficient consideration. Such consideration is often described as ‘nominal consideration’. As Professor Atiyah has observed, ‘a promise for nominal consideration is just about the clearest possible indication that the promisor intended his promise seriously and intended to give the promisee a legally enforceable right’4. However, if the promise to sell the business for such a small amount of money has been extracted by pressure that amounts in law to duress then the promise may not be enforceable but, in the ...

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