Part B The law of obligations 4: Formation of contract II 592 Adequacy and sufficiency of consideration
The long-established rule is that consideration need not be adequate but it must be sufficient.The court will also seek to ensure that a particular act or promise can actually be deemed to be
consideration. Learn these rules:
(a) Consideration need not be adequate (that is, equal in value to the consideration received in
return). There is no remedy at law for someone who simply makes a poor bargain.
(b) Consideration must be sufficient. It must be capable in law of being regarded as consideration by
the courts.2.1 Adequacy
It is presumed that each party is capable of serving their own interests, and the courts will not seek to
weigh up the comparative value of the promises or acts exchanged.Thomas v Thomas 1842
The facts: By his will the claimant's husband expressed the wish that his widow should have the use of his
house during her life. The defendants, his executors, allowed the widow to occupy the house (a) in
accordance with her husband's wishes and (b) in return for her undertaking to pay a rent of £1 per annum.
They later said that their promise to let her occupy the house was not supported by consideration.
Decision: Compliance with the husband's wishes was not valuable consideration (no economic value
attached to it), but the nominal rent was sufficient consideration.2.2 Sufficiency
Consideration is sufficient if it has some identifiable value. The law only requires an element of bargain,
not necessarily that it should be a good bargain.Chappell & Co v Nestle Co 1960
The facts: As a sales promotion scheme, the defendant offered to supply a record to anyone who sent in a
postal order for 1s.6d and three wrappers from 6d bars of chocolate made by them. The claimants owned
the copyright of the tune. They sued for infringement of copyright. In the ensuing dispute over royalties
the issue was whether the wrappers, which were thrown away when received, were part of the
consideration for the promise to supply the record. The defendants offered to pay a royalty based on the
price of 1s.6d per record, but the claimants rejected this, claiming that the wrappers also represented part
of the consideration.
Decision: The wrappers were part of the consideration as they had commercial value to the defendants.As stated earlier, forbearance or the promise of it may be sufficient consideration if it has some value, or
amounts to giving up something of value.Horton v Horton 1961
The facts: Under a separation agreement, the defendant agreed to pay his wife (the claimant) £30 per
month. Under the deed this amount was a net payment after deduction of income tax; for nine months the
husband paid it without any deduction so that the wife had to make the deductions herself. He then signed
a document agreeing to pay such amount as 'after the deduction of income tax should amount to the clear
sum of £30'. He paid this for three years, then stopped, pleading that the later agreement was not
supported by consideration.
Decision: The later agreement was supported by consideration: the wife could have sued to have the
original agreement rectified, but did not.FAST FORWARD