Importance Of Consideration In Contract Law

"The law relating to consideration in contract law lacks clarity and is in urgent need of reform."

Discuss the extent to which you agree or disagree with the above quote. Please give reasons for your answer.

Consideration is central to contract law as it is essential for valid contracts. What is consideration and what is good consideration is discussed in the succeeding paragraphs to understand if consideration in contract law is clear or in need of change.

Contracts made under seal do not need consideration. Intention to make legal relations is clear as it is a formal process facilitated by a solicitor. Hence consideration is unnecessary and all parties are expected to have taken due care when creating the contract.

Consideration is essentially the reciprocation of a promise and only needs to be sufficient, not necessarily adequate. In my opinion, this is a very pragmatic approach since adequacy is highly subjective whilst sufficiency is more objective and it is clearly defined in contract law. Further, only the intention of the parties at the point in time when the contract is created is relevant. This would mean an incidental benefits conferred previously and in future not arising from

For example, the company of one’s favourite celebrity might be adequate in return for paying $10,000 but will probably not be adequate for others. Hence adequacy is rightly, not for the courts to decide upon nor to help someone get out of a bad bargain. This would cause excessive litigation coupled with inconsistent judgments on what is adequate. This however, does not mean that there is no legal recourse in situations where one party feels that the consideration is grossly inadequate. Then, other areas of the law such as proving there was misrepresentation, fraud or other vitiating factors will void the