Question

a) ‘Consideration need not be adequate but it must be sufficient.’ Discuss.

b) The roof of Amelia’s house was damaged in a winter storm. She contracted
with Bertie who told her it was about a week’s work and would cost £10,000.
Amelia accepted Bertie’s price and they further agreed that the work would
be completed before 1 May so that Amelia could host a 21st birthday party at
her house on 3 May for her daughter Camilla.
Bertie began the work on 1 April but bad weather caused many delays. As a
result Bertie said he would only be able to complete the job by 1 May if he
employed extra workmen and this would increase his costs. Amelia offered to
pay him £12,000 if he completed the job on time. Bertie went on to complete
the repairs before 1 May and Amelia paid him £10,000 but refused to pay any
more.
Advise Bertie.

PART A:

It is obvious that no system of law regards all agreements as binding contracts. Every
legal system has regulations defining the many forms of agreements that should be
regarded as enforceable contracts. Only agreements that are entered into in a specific
format are eligible to get the "badge of enforceability" from a legal system. English law
has created a theory of consideration to serve as the primary factor in determining
whether agreements should be accorded the "badge of enforceability," having generally
ignored formal requirements. Leading contract scholars, however, have recently engaged
in a debate over the concept of consideration's fundamentals. A promise should not be
able to enforce a promise unless he has given something in exchange for the promise or
has promised to do so, or unless the promisor has obtained (or been promised) something
in return, according to the orthodox interpretation of consideration, which holds that it is
based on the principle of "reciprocity". "A valuable consideration, in the sense of the
law, may consist either in some right, interest, profit, or benefit accruing to the one
party, or in some forbearance, detriment, loss, or responsibility given, suffered, or
undertaken by the other," was how the classic definition was stated in Currie v. Misa
(1875) LR 10 Ex 153.
According to the doctrine of consideration, consideration must be adequate, but it is not
required to be. In other words, unless something of value is provided in exchange for the
promise, the courts will not uphold it. When it is said that consideration must be
"adequate," this is what is meant. On the other hand, the courts normally do not inquire
as to whether sufficient consideration has been provided in exchange for the pledge or
whether the agreement is harsh or one-sided (although the theories of duress and undue
influence, on which see generally, play an important role here. When it is said that
consideration need not be "sufficient," this is what is meant. Therefore, even though it is
obviously insufficient, it is sufficient consideration if a house worth £160,000 is sold for
just £1. Due to the dictum that consideration must be adequate but not necessary,
extremely insignificant deeds are now accepted as consideration. Chappell & Co v.
Nestlé [1960] AC 87 is the standard example. Gramophone records may be purchased
from Nestlé for £1.60 and three chocolate bar wrappers. The House of Lords determined
that the wrappers themselves, despite having very little economic worth, were still taken
into consideration. This was the case even when Nestlé disposed of the wrapper.
According to Lord Somervell, "a contracting party may specify for such
consideration as he deems appropriate." A peppercorn remains a positive
consideration even if it is proven that the promise will discard it because they don't like
pepper. It would be "ridiculous to assert that the sending or the receipt of the
wrappers necessarily involved an actual detriment to the sender or a benefit to the
defendants," according to Atiyah (1986c), who claimed that this case does not fit within
the "benefit/detriment" analysis. He contends that receiving the wrappers was not a
benefit, but rather the motivation behind the promise, and that a court would have upheld
the promise in this instance despite the promise’s lack of benefit. There is no doctrinal
difficulty in holding that a piece of paper or some act or forbearance of very small value
can constitute consideration, according to Treitel, who responded in 1976. Treitel claims
that Atiyah failed to consider the principle that the courts will not inquire into the
sufficiency of the consideration. What constitutes "worth" in the eyes of the law of
contracts is the essential question that needs to be considered at this point. Treitel (2011)
asserts that even while consideration cannot be "precisely measured," it must have
"some economic worth." However, as we shall see, the courts have not used a
consistent method for determining "value" or "benefit."

PART B:
Whether Bertie will be able to collect the cash Amelia promised her is in doubt. The
agreement said that Amelia hired Bertie to fix her damaged roof, and she agreed to pay
him about $10,000. However, Amelia amended the agreement after the work began on
April 15 to add an additional $2,000 to the cost, and she refused to pay it even after
Bertie finished the repairs. Bertie's second commitment from Amelia was for an
additional £2,200, and he now has to decide if he can carry it out. Bertie was required to
do the task before the deadline after finishing it on time, which begs the question of
whether his current contractual commitment could be seen as reasonable.

The majority of the time, a contractual obligation's fulfilment can be deemed inadequate.
The captain's pledge to enhance the crew members' pay was found to be unenforceable in
the Stilk v. Myrick case since the crew was doing their duties. The claimant had a
contractual obligation to complete the ship's repairs and deliver it back to London, the
court found. As a result, the captain was not required to take the extra funds into account
when determining the payout. Williams v. Roffey Bros involved an exception. Williams
was promised a bonus payment by the builders in this instance, who were subcontracted
to work on several apartments. However, the Roffey Brothers stopped paying Williams
after he fell behind on his tasks. Because the Stilk v. Myrick decision had been clarified,
the court determined that the pledge to pay the additional money was enforceable.

A promise made to someone under a contractual obligation to complete work on time can
be regarded as enforceable if it was made in good faith and did not involve fraud or
duress, according to Gildwell LJ. The work that was completed ahead of schedule
allowed Amelia to profit practically. The promise's practical advantage was demonstrated
by the fact that Amelia was able to celebrate her daughter's birthday without encountering
any difficulties. In addition, she would have paid extra to hire a new contractor. Bertie
would be able to make good on the promise if she had gotten these advantages.

It is crucial to remember that the promise cannot be put under financial stress. In
International Transport v. Universe Tankships Inc., the court determined that even if the
promise received a tangible advantage from the labor, the promisor would not be able to
recover the additional funds. A practical benefit can be viewed as a new consideration,
the court stated in the case of Rock Advertising Ltd v. MWB Business Exchange
Centres Ltd. Bertie said that unless Amelia paid for the additional workers, he would not
be able to complete the project by the deadline. Given that this was a bargain, Bertie
would be entitled to the extra cash. The question is whether this amounts to economic
duress. Bertie might bring up the subject of contract frustration, but this defence would
not be taken into account in the case of Davies Contractors v. Fareham UDC. He won't
be able to fully carry out the promise, even if he makes a point of being frustrated. Bertie
will be able to win his case after bringing up the practical benefit argument, and Amelia
will be compelled to give him the extra cash.