The Doctrine of Consideration

The Doctrine of Consideration
Contract Law
[Author Name(s), First M. Last, Omit Titles and Degrees]
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Author Note

The Doctrine of Consideration 1
In contract law, promises are not enforceable unless when made in deed or supported by
consideration. The concept of consideration creates a problematic explanation both to scholars
and even in courts. This is due to the technicality involved while filtering out the specific
consideration of the parties from the conversation that ended up to the disputed contract.
Traditionally, consideration has been discussed in concurrent with two additional terms which
are adequacy and sufficiency. Specifically, these terms are used together in one of the rules of
consideration which states that consideration does not have to be adequate but must be sufficient.
This statement forms the basis of this paper. The paper intends to bring in to understanding the
meaning of sufficiency when talking about consideration.
Meaning of Consideration
The standard definition of consideration was provided in Currie v Misa where the court
stated that in law, valuable consideration could be either some interests, rights, benefit or profit
accruing to one of the contracting parties.1 Either, it can be some detriment, forbearance,
responsibility or loss suffered by the other contracting party.2 Consideration has evolved to be
one of the main intricate topics in English contract law system. Generally, consideration can be
anything as far as it has some value. It can be a tangible object like goods, or intangible such as a
service provided by one party to another. For a contract to be formed, parties must exchange the
1 Currie v Misa [1875] 10 Ex153.
2 ibid.

The Doctrine of Consideration 2
consideration. One of the technicalities of consideration is that English law requires it to move
from the promisee towards the promisor. So, in other words, the offer comes from the promisor
to the promisee, the consideration flows back from the promisee to the promisor, and it must be
something of value as considered by the promisor.3 The main rationale behind consideration is
that English law does not enforce gratuitous promises or those which are ‘nudum pactum’. What
implication this has to the contracting parties’ is that their contractual arrangements must have
gains and detriments. The gain flows to the promisor while the detriment moves to the promisee.
However, one of the critics regarding this interpretation stated that courts never intended
to create the doctrine of consideration4. Rather, the court only enforced contracts that it deemed
fit and declined to enforce those that it felt unnecessary. With this, consideration just arose to
mean a reason for enforcing the contract.5 Professor Treitel, on the other hand, refuses the idea
that consideration is nothing but the courts' reason for enforcing a contract.6 Treitel argues that
this interpretation does not explain why the court declines a contract. On the other hand, Treitel
states that there are some situations where the court use ‘invented’ consideration treating
forbearance or other actions as consideration even where the parties had not taken such regard.7
Sufficiency of the Consideration
Among the rules of consideration, the English law dictates that consideration does not
have to be adequate, but the law would need to be sufficient.8 In other words, this point means
that courts can only enforce a promise that is supported by something that has value as a return to
what the other party is willing to lose. While looking at this point, the idea is connected to the
3 Thomas v Thomas [1842] 2 QB 851.
4 Ewan McKendrick, Contract Law (12nd ed. 2017 edition, Palgrave 2017) 68.
5 ibid.
6 Edwin Peel, Treitel on the Law of Contract (14th edition, Sweet & Maxwell 2015) 3–001.
7 Edwin Peel, Treitel on the Law of Contract (14th edition, Sweet & Maxwell 2015) para 3–009.
8 Richard Stone and James Devenney, Text, Cases and Materials on Contract Law (Routledge 2014) 84.

The Doctrine of Consideration 3
court’s rationale of avoiding to interfere with the parties’ bargaining. As far as parties accept
whatever the bargained objects were, the court will stick to that despite their adequacy.
The concept of sufficiency instead of adequacy is found on the concept of freedom of
contracts. The work of Edward explains that freedom of contract insists on unrestricted freedom
to contract between the contracting parties as far as the contracting parties are equal in terms of
their skills, bargaining power, and they are fully aware of the status of their market conditions.9
Whether a party’s promise to the other makes an equally fair value it is receiving in return is
sorely left for the parties to decide. Where the court interferes what a party considered in return,
the court would badly affect the parties since it would be the court deciding the bargain but not
the parties. Interfering with this bargain is what Weber termed as a fundamental prohibition.10 In
his work, Weber went further to state that a person’s freedom to form a contract is such a basic
right that it is an individual’s choice to dispose or gain something or a service.11With this
freedom, it is then left upon the parties to decide what would be good or bad for them in the
exchange.
However, even though the court has does not interfere with the bargain, it still maintains
a paternalistic responsibility for ensuring that the consideration that was given by a party holds
some value. It is this court’s responsibility that brings about the concept of sufficiency. In the
ruling of Thomas v Thomas, sufficiency in consideration was taken to mean a valuable item or
service in the law’s point of view. Again, this sufficient consideration must be moving from the
plaintiff to the defendant.12 Sufficient consideration is understood as something real and has an
9 Carolyn Edwards, ‘Freedom of Contract and Fundamental Fairness for Individual Parties: The Tug of
War Continues’ [2009] 77 UMKC Law Review 647 (2009)
<https://scholarship.law.marquette.edu/facpub/281>.
10 David Weber, ‘Restricting the Freedom of Contract: A Fundamental Prohibition’ (2014) 16 Yale Human
Rights and Development Law Journal <https://digitalcommons.law.yale.edu/yhrdlj/vol16/iss1/2>.
11 ibid.
12 Thomas v Thomas. (n 3).