They were paid a fee by the carriers for their services. The laws related to these are very specific and do not hold the chance of loopholes but establishing the inadequacy of consideration can be a complex task for the court. If a creditor is not bound when he receives payment by cash, he should not be bound when he receives payment by cheque.The rule itself was fully reconsidered in 1884 and affirmed in the House of Lords in Foakes V. Beer. [4] Consideration is any act done or not done under the desire of the promisor by the promisee. If he fails to carry out the promise, each of the other two parties with whom he has contracted can sue him independently. In other words, no consideration is inadequate or excessive as it all depends on the bargaining prowess of the parties to the contract. That was a sufficient consideration. In Shadwell V. Shadwell, (1860) 9 C.B (N.S. It is defined as w hen the promisee at the request to the promisor has: Any consideration of the principles involved in this type of situation must of necessity start with Pinnels case (1602), heard by the whole Court of Common Pleas, Lord Coke presiding. Inadequate consideration is not void; however, it can make a contract unenforceable either by itself or due to procedural defects in . Such cases can sometimes be explained on the ground that the stated consideration was a mere . Chappell & Co. Ltd. v. Nestle Co. Ltd. By Vivek Kumar Verma January 14, 2013. There are three basic types:a. When subsequently the proprietors refused to bear the expenses on the ground that the police authority had merely been performing its duty at law, it was held that they were entitled to the money claimed. At Pinnel's request, Cole payed 5-2s-2d (5.11 . As is commonly stated, in the Absence of fraud, duress or misrepresentation, the courts will not question the adequacy of consideration. 1. This benefit or detriment is referred to as consideration. It is for this reason that the court from time immemorial does not inquire into the adequacy of consideration.See also the Queens Bench judgment in the celebrated case of Thomas V. Thomas, (1842) 2 Q.B. Save my name, email, and website in this browser for the next time I comment. Consideration is the price one pays for another's promise. Consideration, in essence, ensures the enforcement of promises made by one party to another, in a manner that is acceptable by the law. Similarly, with promises of reward for not smoking; Humer V. Sidway 27 N.E. Nevertheless, they agreed to risk sailing the ship for extra remuneration.It was held in this case that they could enforce the promise. Adequacy of consideration. No need to spend hours finding a lawyer, post a job and get custom quotes from experienced lawyers instantly. X made an offer in favour of Pegg. If you need help understanding what adequacy of consideration means, you can post your job on UpCounsel's marketplace. Consideration is defined under Section 2d of the Indian Contracts Act, 1872. The value of the consideration does not have to be adequate. The plaintiff, relying on the promise, had gone ahead with the marriage, thereby incurring financial obligations. [7]S. 25(f), The Indian Contract Act, 1872. In Scotson V. Pegg, (1861) 6H.&N.295; 2 L.T. In this case, the parties showed no discomfort with the consideration during the making of the agreement. See the case of Thomas v Thomas (1842); Forbearance (where you refrain from taking someone to court) is seen to be sufficient . It is important to state that individuals and corporates enter into contracts or agreements on a daily basis. Consideration of the material; You should keep the nature of the material in mind. chocolate bar wrappers in Chappell v Nestle [1960] deemed to be sufficient. [16]S. 10, The Indian Contract Act, 1872. The second case that explains the statement " consideration must be sufficient but need not to be adequate " is the case of White v Bluet. Thus in the absence of fraud or duress, the courts will not investigate the value of the car to see whether $5 is a fair price for it. Share it with your network! Fundamental Rights Under the 1999 Nigerian Constitution (Chapter 4 of the Constitution). This was sufficient consideration for the promise to pay for the service. There has been no judicial analysis of this term aimed at revealing its meaning and scope. It must comprise some element which can be regarded as the price of the defendant's promise. Once that is established the question for adequacy of consideration has not been entertained by the court. It requires an act or abstinence, the desire of the promisor and execution of the promise. The appellant filed a suit against all the respondents under specific performance. Sandrifarm Sdn Bhd v Pegawai Pemegang Harta Malaysia [2000] 2 MLJ 535, CA. Once the parties agree upon a consideration, it may be considered binding even if the price may not be totally equivalent to the promise. Consideration is something of value that is exchanged in return for the promise of performance by the other party. Following this, the plaintiff had invested money which was immediately misappropriated. He insisted that a determination of the adequacy of consideration requires a case-by-case analysis in order to protect "at-will employees from the whim of the employer." Here, in his view, it was relevant that McGinnis signed the covenant at the time he was hired, that the period of McGinnis's post-covenant employment (18 months) was . Schlup v Intermark Int'l. Inc., 1989 Ohio App. Even lawyers sometimes get it wrong hence the criticisms that have followed it right from the evolution of the law of contract. On the issue of consideration furnished by the defendants in this contract, their Lords held that the act of unloading the goods constituted consideration notwithstanding the fact that the defendants were already bound to unload the goods in their contract with the carriers.In their Lordships opinion, an agreement to do an act which the promisor is under an existing obligation to a third party to do, may quite well amount to valid consideration (and it was so in the present case): the promise obtains the benefit of a direct obligation which he can enforce. If a consideration involves a worthless item or a misleading promise, it is deemed inadequate. Save my name, email, and website in this browser for the next time I comment. [5] The judiciary believes that this matter is entirely in the hands of the parties and their involvement should not be there. After completion of the work, and fully aware that the plaintiffs were desperate for funds, the defendants offered to pay 300 in full discharge of the debt, or nothing. Graff v. Geisel, 39 Wn.2d 131, 138, 234 P.2d 884 (1951). Adequate consideration refers to a price which is equal in value for an act or a thing for which it is given. MUST A CONSIDERATION BE ADEQUATE Illustration (f) Section 26 'A' agrees to sell a worth RM1000 for a RM10. Under the Seamens Contract, they were obliged to sail the ship under these circumstances. The benefit is also derived from the plaintiff at the uncle's request. For example, if A promises B lunch from B's . [3] Section 2(d) specifies the definition of consideration. As is commonly stated, in the Absence of fraud, duress or misrepresentation, the courts will not question the adequacy of consideration. Thus, in African Petroleum Ltd. V. Owodunni (1991) 8 NWLR (pt.210) 351. In equity, inadequacy of consideration, if such as to be evidence of fraud, is ground for refusing specific performance; and inadequacy of consideration is regarded as corroborative evidence in suits for relief from contracts on the ground . UN-2 The question whether such an assessment is sufficient entails consideration of the merits of the case rather than consideration of the adequacy or otherwise of the . Ltd., Onalaja, J.C.A., put it as follows at the Court of Appeal: inadequacy of consideration does not ordinarily vitiate the essentials of a contract once there is valuable or sufficient consideration. The police felt that they could control the situation by a mobile force which would be rushed to the mine at the first hint of trouble. It can take a number of forms: money, property, a promise, the doing of an act, or even refraining from doing an act. The consideration can take the form of an act (doing something) or forbearance (not doing something), or a promise to do something or not to do something. If this does not apply to you please use the 'Apply' option. In Sum, the rule remains that consideration must be sufficient but need not be adequate. It is a criterion that makes an agreement enforceable. In essence, contracts are everywhere even on the internet these days. Giga-fren. It was held that because this had to increase the sale of the defendant therefore once accepted the contract was made and the consideration was acceptable. [8] The payment of 12000/- satisfies the conditions laid in section 2(d) as the consideration is of the desire of the promisee and it is the act done by the promisor in exchange for a promise made by the promisee. Sufficiency of Consideration vs Adequacy of Consideration, https://cilexlawschool.ac.uk/wp-content/uploads/2018/10/HQ02-Law-of-Contract-Sample-2018.pdf, LAW APPRENCTICESHIP 101: Titbits On Cross Examination, God Forbid that a Lawyer knows all the Law, Legal snippets to never forget when dealing with the Nigerian Police, Sample Draft of Notice of Preliminary Objection in Nigeria. 1 : Issue 4 BNWJ-1020-049, Jurispedia Vol. Sufficient Consideration, 5. Adding to this a similar case of Devji Shivji v Karsandas Ramji [12]where it was held that the transfer of goodwill and the whole of assets of business even though for just Rs 1000 was upheld. In desperation, the plaintiffs accepted. The plaintiffs legal basis for going back on his promise would be that the defendant did not furnish consideration for it. Thus, in Cumber V. Wane (1846) 15 M. & W. 23; the plaintiff who had earlier accepted a promissory note for part of a debt owed him by the defendant subsequently sued for the balance. While commenting on the respondents consideration in this tenancy contract, which he referred to as chicken change , Nnaemeka Agu JSC nevertheless declared that it is fundamental that the courts will neither make a contract for the parties nor inquire into the adequacy of consideration. The consideration decided in the agreement was Rs 12000/- According to section 2 (d) of the Indian Contracts Act of 1872, consideration can be any act or abstinence of an act done by the promisor under the desire of the promisee. Why is Consideration Important in a Contract? Section 25 suggests that an agreement done under the free will are not void merely because the consideration is not adequate. The Indian law states that adequacy of consideration is not necessary. The dictum of Daniel Kalio JCA in BELLO & ORS v. BELLO (2016) LPELR-45456 (CA) would offer further illumination on our discuss so far; I will begin with the submission that once there is consideration, it need not be adequate. However, in Sibree V. Tripp and Godard V. Obrien, (1882) Q.B.D.37., the defendants who paid lesser sums in discharge of a greater sum by way of negotiable instruments, successfully relied on the concept of new elements inherent in the exceptions to this rule in Pinnels case.It was held that payment by use of paper, instead of cash, constituted a new element, and, therefore, consideration for the promise to accept a smaller sum. Adequacy of Consideration. This means that they do not measure the comparative values of the considerations furnished by the plaintiff and the defendants respectively nor will they declare a contract to be invalid simply because one party has got a much better bargain than the other. Adequacy of Consideration - Free download as Word Doc (.doc / .docx), PDF File (.pdf), Text File (.txt) or read online for free. The Department also holds the view that in making assessments of the adequacy of managers' actions, consideration must be given to the environment in which decisions are made. It is for this reason that the court from time immemorial does not inquire into the adequacy of consideration.