The consideration doctrine contracts doctrine, theory and. As nouns the difference between adequacy and sufficiency is that adequacy is the quality of being sufficient, adequate or able to meet the needs while sufficiency is quality or condition of being sufficient. The court in currie v misa declared consideration to be a right, interest. Sufficiency and adequacy of the consideration the two. An outline of the rules relating to past consideration, existing duties, sufficiency and adequacy and part payment of a debt. Among the various rules of consideration i tend to center this discussion on the first rule which has attracted a lot of concern among legal writers and indeed relevant in the build up of the doctrine of consideration. Adequate consideration is a benefit or detriment which a party receives which reasonably and fairly induces them to make the promisecontract. It is an elementary principle that the law will not enter into an inquiry as to the adequacy of the consideration. Legal sufficiency of consideration what is required vs.
Consideration must be sufficient though not necessarily adequate. In equity, inadequacy of consideration, if such as to be evidence of fraud, is ground for refusing specific performance. North carolina courts clarify adequacy of consideration. Because both nominal and inadequate consideration make a promise legally binding, most groups dont distinguish between the two terms. Now, therefore, in consideration of the premises and the mutual covenants set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto covenant and agree as follows. Consideration is a concept of english common law and is a necessity for simple contracts but. A court will not question the adequacy of consideration base solely on the comparative value of the things exchanged. According to the law, consideration for a contract must be sufficient but it need. In law, adequacy of consideration means that for a lawful agreement to be made between two parties, the offeree, also known as the beneficiary, must give in return, a fair. Problems in consideration bargain promises and the mutuality.
Under classical contract theory, consideration is required for a contract to be enforceable. More than just the one word consideration is needed to determine what word goes best after it. Sufficiency vs adequacy of consideration essay example. What are legal, sufficient and adequate consideration and. Consideration is an important element of a contract. Adequacy of consideration means that for a lawful agreement to be made, the offeree must give a price that is equal measure to the value given by the offeror. G enerally, courts of law will not inquire into the adequacy of consideration if the consideration is legally sufficient. The comparative value of the promises and acts exchanged in the making of an agreement between two contracting parties. In short, courts do not inquire into the adequacy of consideration. Consideration must be sufficient but need not be adequate. Because it is difficult to compare the worth or value of different items, adequacy of consideration is determined by evaluating the parties to the contract. Adequate consideration is defined as adequate consideration the fair value of an asset as determined in good faith. Trischa manntrischa mann, audrey blundenaudrey blunden. The dispositive issue is presence of consideration, not adequacy of the consideration.
The latter phrase is concerned not with comparative value but with that which will support a promise. Sufficient consideration law and legal definition sufficient consideration is a consideration deemed by law to be of sufficient value to support an ordinary contract between parties. The technical requirement is either a detriment incurred by the person making the promise or a benefit received by the other person. Jun 07, 20 1st documentary movie on the origin of ccp virus, tracking down the origin of the wuhan coronavirus duration. That promise was voluntarily and deliberately made. In white v bluett 1853, bluett sued his fathers will for an outstanding debt to. Aug 30, 20 adequate vs sufficient there are many pairs of words in english that have very similar meanings. Consideration in contract law is simply the exchange of one thing of value for another. Adequate consideration is a benefit or detriment which a party receives which reasonably and fairly induces them to make the promise contract. Take a look at the following examples to understand the meaning and usage of the adjective. If you sell your house for a dollar, thats up to you and you cant set it aside on the basis that the consideration was too small. This rule is based on what constitute a valid consideration, sufficiency or adequacy. Thomas v thomas1842 before thomas died, he expressed to his wife that he wanted her to remain in the house when he had. Explain adequacy and sufficiency of consideration as documented in theacca lw f4 eng textbook.
Nov 16, 2015 the phrase good and valuable consideration is a standard feature of recitals of consideration in business contracts. Sufficiency of consideration in unilateral contracts is discussed by professor. Adequacy of consideration legal sufficiency of consideration involves the requirement that consideration be something of legally sufficient value in the eyes of the law. Modern contract theory has also permitted remedies on alternate theories such as promissory estoppel. What is the difference between adequate consideration and. Consideration is only present when the parties mean to have an exchange. Consideration must also be a legal and possible performance. Executory consideration is the exchange of a promise by the. Consideration need not be adequate but must be sufficient. Consideration is a concept of english common law and is a necessity for simple contracts but not for special contracts contracts by deed. Adequacy of consideration is the quality of having an economic value equivalent to that of the promise bought by the. In addition to monetary sums, consideration can also involve a promise to do something, or a promise not to do something. Public users are able to search the site and view the abstracts and keywords for each book and chapter without a subscription.
Consideration, which must be given in order to make a contract legally binding, is legally sufficient and bargainedfor value, given by the promisor in return for the promisee performing or refraining from performing some act which results in a detriment to the promisee andor a benefit to the promisor. Jun 14, 2016 contract law for beginners formation of contracts the doctrine of consideration part 4 c of 7. Before employment commences, this is a relatively straightforward analysis, as an offer of employment adequately meets the valuable consideration threshold to support a restrictive covenant. What is the difference between legal sufficiency of. It is also defined as a consideration that is sufficient to support a particular transaction. Difference between adequate and sufficient compare the. Executory consideration is the exchange of a promise by the defendant in return for a promise by the plaintiff. However, consideration must be sufficient but need not be adequate. The price can be in the form of money, property, an act, and promise to do an act or not to do an act.
Consideration must be sufficient but does not have to be adequate. Where consideration is recognized by the law as having some value, it is described as real or sufficient consideration. What constitutes sufficient consideration, however, has been the subject of continuing legal debate. Adequacy of consideration legal definition quimbee. Introduction consideration is one of the essential elements for a formation of a contract. Adequate consideration refers to whether the consideration received by one party is sufficient or fair in light of the consideration the other party gives. Generally, the courts will not reform a contract because one party made a bad bargain. If you have something in quantities that are enough to serve their purpose, there are two words sufficient and adequate that are most commonly used. Start studying what is the difference between legal sufficiency of consideration and adequacy of consideration learn vocabulary, terms, and more with flashcards, games, and other study tools. By past consideration, the courts mean an act that could have served as consideration if it had been bargained for at the time but that was not the subject of a bargain. However, these examples are extreme interpretations of the rule, and courts will not judge the consideration s adequacy. Regarding the adequacy of consideration in a contract, the following principles are generally applied by a court in a contract setting. The requirement for there to be consideration before there will be a legally binding contract in english law emphasises the theory held by many legal commentators and theorists that contract is based upon a bargain something for something else. An agreement supported by inadequate consideration remains enforceable and what is an adequate consideration for ones promise is.
The concept has been adopted by other common law jurisdictions, including the us. The price stipulation within a contract that establishes equivalence in the exchange of value in the form of money, goods or services. In common law systems, consideration is a necessary element for an enforceable contract. Any exchange of value that is deemed not to be equivalent could render the contract unenforceable.
Sufficient consideration is a consideration deemed by law to be of sufficient. The essay will examine in depth through analyzing academic commentary and case law consideration, adequacy in relation to consideration and if it is necessary that consideration. Quantifying what constitutes sufficient consideration for purposes of enforcing a restrictive covenant can be quite challenging. The related rules section is for members only and includes a compilation of all the. Adequate consideration law and legal definition uslegal. It is an essential element for the formation of a contract. Consideration, in contract law, an inducement given to enter into a contract that is sufficient to render the promise enforceable in the courts. In this scenario, each side gains something of value or consideration from the agreement. Consideration can be anything of value such as an goods, money, services, or promises of. Contracts and courts generally use the term valuable consideration to signify consideration sufficient to sustain an enforceable agreement. Therefore it is very important that you understand the way that consideration may affect your contract. Valuable consideration legal definition of valuable consideration. Access to the complete content on oxford reference requires a subscription or purchase.
Califjim note, however, that in all examples of consideration. This is sufficient consideration, since bs consideration is a guaranteed. For example, a promise to quit drinking alcohol may be considered adequate consideration. Parties themselves are sometimes heard to complain that they have not received real or sufficient consideration for their promises. Inadequate consideration of the adequacy of consideration is an avoidable impediment to enforceable noncompetes by david goodman on february 17, 2015 at 10. It is axiomatic that a contract requires consideration to be binding. As we saw in in re greene, courts are sometimes skeptical about whether purported consideration embodies a genuine exchange or merely disguises an otherwise unenforceable gift. In general, adequate seems to suggest that the quantity is just enough or sufficient for the purpose that is being talked about. In law, adequacy of consideration means that for a lawful agreement to be made between two parties, the offeree, also known as the beneficiary, must give in return, a fair price, that is either in equal measure or reasonably proportional to the value given by the offeror, also known as the benefactor. A noncompete clause cannot be enforced if it lacks sufficient consideration.
Every contract must have some consideration something of value must exchange hands. Ordinarily, past consideration a promise subsequent to a promisees act, not bargained for. But adequacy of consideration, into which courts seldom inquire, is to be distinguished from the legal sufficiency of any particular consideration. Now, therefore, in consideration of the premises and the mutual covenants set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto covenant. The values between consideration passed by each party to a contract need not be comparable. You may wish to contact a contract lawyer if you have issues over contract consideration. It means consideration must be having some values, whether it appropriates in order to meet the return of the agreement. The courts are not concerned with the economics of the contractual bargain.
Consideration, which must be given in order to make a contract legally binding, is legally sufficient and bargainedfor value, given by the promisor in return for. It may consist of a promise to perform a desired act or a promise to refrain from doing an act that one is legally entitled to do. Providing consideration has some value, the courts will not investigate its adequacy. Defendants exercised their own discretion in determining the adequacy of the consideration for their promise. It is one of the six elements that must be present for a contract to be enforceable. First off the law does not consider adequacy of consideration in the validity of contracts. Consideration is an essential element for the formation of a contract. Adequate consideration refers to a price which is equal in value for an act or a thing for which it is given. To form a contract in the united states, there must be consideration. Jul 31, 2010 consideration is one of the requirements needed to make an enforceable contract.
Note, however, that in all examples of consideration with to in this thread so far, the to doesnt go with consideration, it goes with the verb give. It means that although consideration must provide some benefit to the promisor or detriment to the promisee, these do not. Sufficiency and adequacy of the consideration the two words. Plaintiff had nothing to do with inducing the defendants promise. Sufficient consideration is a consideration deemed by law to be of sufficient value to support an ordinary contract. The legal sufficiency of consideration will ordinarily be a question for the court.
A contract without consideration is void ab initio. Illinois courts continue to grapple with the adequacy of consideration for noncompete agreements by colin a. Consideration is a central concept in the common law of contracts. Consideration is one of the requirements needed to make an enforceable contract. But this does not mean that there must be enough consideration. Consideration is an english common law concept within the law of contract, and is a necessity.
Adequate consideration the value is based on an assessment of what is faur under circumstance, while sufficient consideration does not require that the value be fair, but rather that it have some value and not be worthless insufficient. What does in addition to other valuable consideration. Inadequate consideration of the adequacy of consideration. But, if it is not for value, it is not an enforceable contract in addition to other valuable consideration that would mean the stated consideration and other unstated consideration the receipt and sufficiency of which consideration is hereby acknowledged that. Consideration can also be an issue at several different stages of the contract, such as when the contract needs to be rewritten. Sufficient consideration law and legal definition uslegal, inc. Adequacy doctrine contracts doctrine, theory and practice.
The concept of consideration has been adopted by other common law jurisdictions, including the us. Discuss the differences among adequate consideration. The consideration must be sufficient but need not be adequate. This essay will focus on the element of consideration in a contract and more specifically it will argue that consideration need not be adequate b ut must be sufficient. It is not the function of contract law to save a man from a ruinous agreement. If the plaintiff did the acts called for by that promise, defendants cannot complain of the adequacy of the. According to the law, consideration for a contract must be sufficient but it need not be adequate. Courts are loath to inquire into the adequacy of consideration, that is, into the. Contract law for beginners formation of contracts the doctrine of consideration part 4 c of 7. If there is insufficient consideration a court may say there is no contract.
What does consideration must be sufficient but need not be adequate mean. Executory and executed consideration is the way in which the plaintiff purchases the offer or promise of the defendant. The dispositive issue is presence of consideration, not adequacy of the. Apr 08, 2016 this essay will focus on the element of consideration in a contract and more specifically it will argue that consideration need not be adequate but must be sufficient. But, it need not necessarily be equal in value to the promise of other. The validity of the contract is not dependent upon the adequacy of the consideration, provided it is something of. Good and valuable consideration adams on contract drafting. Oct 05, 2012 first off the law does not consider adequacy of consideration in the validity of contracts. If the adequacy of consideration becomes an issue see the comment below, it will. May 23, 2007 adequate consideration is defined as adequate consideration the fair value of an asset as determined in good faith. This means it needs to be something of value to the other person but how much it is is not the business of the court. Sufficiency and adequacy of the consideration the two words are different in law what this means is that consideration must have some value the consideration must be sufficient but need not to be adequate. Adequate consideration law and legal definition uslegal, inc.
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