3 Consideration
All contracts require something to be given in return for something else
from the other party. That ‘something’ is called consideration and each
party to a contract must supply consideration for the contract to be valid.
This is the bargaining element of a contract, where something is to be
gained on each side. A classic definition of consideration, in terms of
benefit and detriment (the opposite of benefit, where something is given
up), was given by Lush J in Currie v Misa (1875), when he said:
A valuable consideration may consist either in some right, interest,
profit or benefit accruing to one party, or some forbearance, detriment,
loss or responsibility given, suffered or undertaken by the other.It is perhaps easier to think of consideration as the price paid for the
contract, and this certainly fits in with the commercial concept of
bargaining and gain. The House of Lords adopted Pollock’s definition of
consideration in Dunlop v Selfridge (1915):
An act or forbearance of one party, or the promise thereof, is the
price for which the promise of the other is bought.So, if A agrees to dig B’s garden for £5, A’s promise to dig is the price paid
for B’s promise to pay £5.
Is this a fair bargain?If I buy a kilo of potatoes for 50 pence, the potatoes are the seller’s
consideration, and the 50 pence is my consideration. If, however, I ask for two
sacks of potatoes, to be paid for when the potatoes are delivered on Friday,
what is the consideration on each side?