Explain the "benefit/detriment" theory of consideration within a contract.

Expert Solution

Benefit-detriment theory is one in which a contract must be considered either to the benefit of the promisee or to the detriment of the promisee (though to the detriment of the promisee is an necessary and invariable measure of the presence of a factor rather than whether it can be to the advantage of the promisee.

Occasionally, the court may refer to "adequate" or "valuable" consideration, but in fact , the court does not find the adequacy of the consideration, but whether or not it has been negotiated. Nominal consideration is another term for this kind of non-bargained contract. The conventional notion that courts do not accept the adequacy of consideration, an ancient notion in English common law, is not in accordance with the theory of benefit-detriment (in which courts are implicitly evaluating whether the parties obtain adequate benefit), but is in accordance with the bargain theory(in which only the subjective interests of the parties are considered).

Rahul Sunny answered 2 years ago

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