Report on the Consideration for a contract must be sufficient

but it need not be adequate

LAW 200: Legal Environment of Business

SECTION: 17
Fall, 2020

Date of Submission: 17th December, 2020

Table of Content

1
Serial No. Content Page
No.
1 Introduction 3

2 Contract 4
4
Agreement
5
The Essential Elements of a Contract

3 Void Agreements 6

4 Consideration need not be adequate 6

5 Consideration may move from the promise or any other person 6

6 Consideration must be sufficient but need not be Adequate 7

7 Conclusion 7

Law-200

Consideration for a contract must be sufficient but it need not be adequate

2
Introduction
At first, when the contract makes then the contract has four elements that are mandatory in the
consideration. The four elements are offer, acceptance, consideration, and intention.
Consideration is a very important element for the contract when making a binding contract
consideration must be present with the main purpose. The principle of consideration ensures that
the agreement between parties when a contract make then promised to exchange something that
has value in the viewpoint of the law.

However, consideration for a contract must be sufficient but it need not be adequate because
consideration has some legal value whether it appropriate to meet the return of the agreement.
The parties will not agree to make an agreement in oral promises and in the exchange of
something which has exchange value. Also, they do not need to have the same value or equal
value of exchange and law takes the value of exchange as a consideration as adequate where both
the parties are agreed to the exchange the value. If the consideration is legal then the condition is
both the parties agree to an agreement and respect each of the parties with one another that
subject to exchange or promise in exchange.

Consideration is very important in the contract and it always needs because no one ever knows
how a person's action will affect the other people. Consideration is an important element of a
contract where does work consent of the parties and the object of the contract. If any element
does not present then no contract is made. Consideration has another substitute like offer and
acceptance and consideration developed than the main focus to create legal relation that always
present.

In law, consideration has three major building blocks of a contract. Anything can happen in the
value where every single party does binding contract legally and must keep their word for
exchange if the contract is valid. Sometimes binding a contract the agreement is illegal because
only one party offers consideration in the contract. When the contract is made, sometimes one
party must give or promise to exchange or return based on the agreement.

In case study presents that in White and Bluett, Bluett sued against his father due to outstanding
debt and he said that his father promised to return the debt. Unfortunately, his father said that to

3
stop the claim against him in return for the debt. In the court, Bluett appeal against his father but
the court did not find any legal contract as real consideration. So Bluett still liable for the debt
and the court discharge the father. In this case, the exchange of promise must real and tangible in
consideration.

Contract:

Contract the word comes from “Latin work Constructs” and it means that the term of the
contract, meaning, who, what where, when, and how of the agreement can happen legally and
describe to keep binding promises for each party to the contract. A contract is a type of
agreement between two or more parties who are willing to do an agreement in which an offer is
made and accepted and can get benefit to each party. The contract can make formal, informal,
written, and oral or just plain understood where a party does legally. A contract can create and
define the obligation between the parties. In a contract, every agreement and promise must be
enforceable at law and two or more people to do. Generally, contact can be written to use formal
or informal or informal terms, or they can be entirely verbal.

Agreement: Agreement main thing is a sort of promise, every set of promises, forms the
structure in consideration for each other party. The essential part of the agreement is, without
considering the agreement cannot make.

According to Sir William Anson

“A contract is an agreement enforceable at law made between two or more parties, by which
rights are, acquired by one or more to acts or forbearance on the part the other or others”

The Essential Elements of a Contract

4
An agreement becomes legal action by law when it completes a certain condition. Those
conditions are an essential element of the contract which is explained below.

Offer and Acceptance: In this situation, the one-party must provide a lawful offer and the other
party keeps a lawful acceptance of the offer and acceptance must fulfill the contract act rules in
the watt of offer and acceptance.

Intentions to create Legal Relationship: Every contract must be an intention among both

parties that the result of the agreement is legal or create legal relations. If a person to go to dine
at his friend’s house that is not an agreement intended and no need for a legal agreement and it is
out of a contract. When an agreement happens between two or more parties with the buy and
sells goods or an agreement to marry, to create some legal relationship that is called contract and
provide the essential element which is currently available.

Lawful Consideration: This has a certain expectation where each party to get something or to
provide something which is legally enforceable. Each party something gets and obtains is called
consideration. Consideration can be past or it may be present or future but only some
consideration is valid those are “lawful” consideration.

The capacity of Parties: Parties between agreements become legally acceptable when agreeing;
otherwise it must cancel by a court of law. The adequate capacity increase from the minority,
lunacy, idiocy, drunkenness, and similar other factors. In case any party to the agreement suffers
any disability then the agreement is not acceptable and enforceable by law except in some
special case.

Free Consent: The agreement happen based on the free consent of all parties. In the agreement,
a lack of genuine consent if the agreement happens by the coercion undue influence, mistake,
misrepresentation, and fraud. If one party does guilty with the other party then it cannot enforce
the agreement but the other party can enforce it because it is the rules and laid down in the act of
law.

The legality of the Object: The main object in the agreement is when entering an agreement
then it must not be illegal or immortal or opposite of the public policy

5
Certainty: The agreement must be clear, well defined, and provide a clean concept that has
certainty and it must not be vague. The agreement will have possible certainty otherwise it
cannot be enforced.

Void Agreements: 

An agreement must not include which is already void or invalid. Under the contract act five-
category which is declared to be void

1. Agreement in restraint to marriage.

2. Agreement in restraint of trade.
3. Agreement in restraint of proceedings.
4. Agreements having uncertain meaning.
5. Wagering agreement.

Consideration need not be adequate:

An agreement that occurs between two parties who agree to freely given is not void morally due
to the considerations for a contract is inadequate and the inadequate of the consideration take
place in the court in case of freely gives.

The consideration does not become legal immoral or opposed to public policy if the
consideration of the agreement does not become illegal and the agreement cannot be enforced.
Sometimes some principle of the consideration applies when consideration goes to immoral or
opposite to public policy.

Consideration may move from the promise or any other person:

Suppose person A has properties and he granted some properties to his wife C to direct her and
that time he also pays an allowance to his brother B. So C has an interest in an agreement with B
and A promise to pay an allowance to his B. So this agreement can legal and enforced by the B.

A good consideration:

Some good rules for the consideration that necessary for a contract

6
  There must be the desire of the promisor;
 It must be real
 It should be reasonable
 It cannot be illegal immoral or opposed to public policy
 Present, Past, and Future  and
 The promise can move from the promise or any person

Consideration must be sufficient but need not be Adequate

Every consideration provides some value and the court never investigates its adequacy but will
check the legal consideration. So consideration is accepted by the law with some value and it
describes that consideration is “real” or “sufficient”. The court never checks or investigates a
contract between parties if each party gets equal value.

Consideration must move from the promise

The person who is willing to enforce the contract must focus that they need to provide
consideration. It is not enough to show someone provides consideration and a person needs to
show the promise that is moved from him. The consideration does not move without the
promisor. When more than two parties are involved that problem can arise.

Conclusion

The Law of contract and its part of the consideration is very essential for us and it last but not the
least. The main purpose of the law is order and this order can give a man some sort of security as
to the future. The importance of law is a consideration that is the most valuable fact regarding the
future. If consideration has not in the agreement then cannot make a contract. Consideration is
essential elements in the formation of contracts that ensure only the most important agreement is
considered in contracts. The court does not allow if the contract has no proper consideration. So
the only court that allows the agreement if contain consideration has economic value to be a
contract.