Consideration 53Consideration
A contract is a bargain under which each party must give some benefit, known as consider-
ation, to the other. The consideration of one party is given in return for the consideration
of the other. For example, let us assume that I visit a garage and agree to buy a new car
for £9,999. A contract has been made. My consideration is the promise to pay £9,999 to
the garage. The garage’s consideration is its promise to pass ownership of the car to me. In
bilateral contracts, such as the one used in this example, the consideration of both parties
consists of a promise to do something. The one promise is given in return for the other.
In unilateral contracts the consideration of only one of the parties consists of a promise
to do something. The consideration of the other party consists of actually performing the act
requested by the promisor. For example, if I offered a £100 reward to anyone who found my
lost dog, and you found the dog, a unilateral contract would have been created. My consid-
eration would have been the promise to pay the reward. Your consideration would have
been the act of finding the dog.
If only one of the parties gives some consideration then a contract will not be created.
Instead, any agreement will be a gift. So if a garage offered to give me a car for nothing, and
I accepted this offer, there would be no contract. The garage would have provided some
consideration to me, by promising to give me the car. But I would have provided no con-
sideration to the garage. Therefore there would be no contract and the garage would not
have to give me the car.
Later in this chapter we shall see that the promise of a gift is not enforceable unless the
promise was made by a deed. When an agreement is made by a deed, it is enforceable as a
specialty contract even if no consideration was received by one of the parties.
Figure 2.3Intention to create legal relations
‘intrinsic problems...on the question of whether a necessarily casual conversation could be elevated
into an agreement binding and enforceable in law.’
The approach which a court will take is shown in Figure 2.3.