Question

Our textbook states: "As a general rule, an agreement without consideration will not be an enforceable contract, because consideration is so important as the binding element within a contractual relationship." Research and explain why this is so. In so doing, define and discuss the concept of consideration, including within your discussion the distinction between adequacy of consideration and sufficiency of consideration.

This is an open ended question, so just need to answer it with supporting information and why you think so.

Answer 1

Consideration is the concept of value offered and accepted by people or organisations entering into contracts. Anything of value promised by one party to the other when making a contract can be treated as "consideration"

A contract in its most basic definition is nothing more than a legally enforceable promise.

A contract where the parties exchange a promise for a promise is known as a Bilateral Contract, whereas a contract where one party gives a promise and the other party performs an act is known as a Unilateral Contract.

These legally enforceable promises may be in writing or oral. Either way, the formation of a legally binding contract requires two basic elements, consideration and mutual assent. This chapter will cover the issues and problems involved with consideration. We will cover mutual assent in the next chapter.

Essentially, consideration is simply what you give up in the deal for what you get out of the deal.

The idea of consideration is vital to contract law because, in order for a contract to be enforceable, there must be “mutuality of obligation.” In other words, in order for a contract to be valid, both parties to the contract must be required to perform under the contract. Consideration, which represents the commitment that the parties to the contract make to each other, is at the heart of the “mutuality of obligation” rule and, therefore, without consideration, a contract will not be enforceable

In common law it is a prerequisite that both parties offer consideration before a contract can be thought of as binding. The doctrine of consideration is irrelevant in many jurisdictions, although contemporary commercial litigant relations have held the relationship between a promise and a deed is a reflection of the nature of contractual considerations. If there is no element of consideration found, there is thus no contract formed.

Whether there's a legal detriment to the promise, of a legal benefit to the promisor" Does not address fairness. Something that has value. Sufficient is something of value, insufficient has no value.

Adequate consideration is a benefit or detriment which a party receives which reasonably and fairly induces them to make the promise/contract. For example, promises that are purely gifts are not considered enforceable because the personal satisfaction the grantor of the promise may receive from the act of giving is normally not considered adequate consideration.

The difference between adequate consideration and sufficient consideration is that with adequate consideration the value is based on an assessment of what is fair under the circumstances, while sufficient consideration does not require that the value be fair, but rather that it have some value and not be worthless (insufficient).

There is a legal maxim in law of contract that states that "Consideration needs not be adequate but must be sufficient" This maxim clearly establishes difference in both words (though similar). Adequacy is more exact in nature that sufficiency. This means something is adequate if its exactly equal to requirement whereas sufficiency means something is within a relevant range of the requirement