Introduction

The concept of consideration is the principal way in which English courts decide
whether an agreement that has resulted from the exchange of offer and acceptance
(as explained in Chapter 2) should be legally enforceable. It is only where there is
an element of mutuality about the exchange, with something being given by each
side, that a promise to perform will be enforced. A promise to make a gift will not
generally be treated as legally binding. It is the presence of consideration which
makes this promise binding as a contract. It is possible to see consideration as an
important indication that the parties intended their agreement to be legally binding
as a contract. Although there is a separate requirement of an intention to create legal
relations (discussed in Chapter 4), it is clear that historically this requirement was also
fulfilled by the requirement of consideration. While the doctrine of consideration
is crucial to English contract law, it has been applied with some flexibility in recent
years. In some circumstances, English courts will find that a promise given without
consideration is legally binding and this chapter concludes with an examination
of these instances. These instances are decided upon on the basis of the doctrine
of promissory estoppel and in this area the courts are concerned to protect the
reasonable reliance of the party who has relied upon the promise. These instances
arise where there is a variation of existing legal obligations.