Also, it is vital to note that whether a contract is valid, enforceable or otherwise often depends on a number of factors one of which is the nature of the contract (or agreement) itself. Hence, the contract can be held valid and enforceable against the other party (Mr A) in the absence of fraud or duress. It was held that the promise was unenforceable as all the work had been done before the promise . Once that is established the question for adequacy of consideration has not been entertained by the court. there is authority for the position that a consideration so small that it negates [5]Avtar Singh Contracts& Specific Relief (12 ed. Case reference: Bolton v. Madden (1873) Held " the adequacy of the consideration is for the parties to consider at the time of making the agreement, not . The defendants relied on earlier decisions that payment os a smaller sum by a negotiable instrument in discharge of a larger sum was a valid exception to the rule in Pinnels case.The court dismissed this argument and held the defendants liable to pay the balance of the debt. When a promise is made to create a legal obligation, it puts a value on the performance of such promise; that value is called consideration. As a case study, we analyze a real dataset of the output powers of six wind turbines that constitute a wind farm situated in Poland. Cases. Adequacy of Consideration, Adequacy of Consideration, Adequacy of Consideration. 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. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Your email address will not be published. The proprietors were, however, dissatisfied with this proposal and they agreed to bear the expenses of stationing policemen at the mine premises for the duration of the strike. Intraoperative indocyanine green (ICG) imaging is a promising method for evaluating blood perfusion of organs and vessels. 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. Once the contract has been made willingly and with consent then the question of inadequacy of the consideration holds no ground and such a contract irrespective of the inadequacy of the consideration will be binding and valid. An expression of an offer can be communicated through different channels, such as a newspaper, a letter, or an ad, as long as it details the conditions of the offer. Consequently, no consideration is ever too small or too much or unfair in the absence of fraud, duress or misrepresentation. 872., the circumstances were similar to Stilk V. Myrick, but the ship was so short-handed that it would have been extremely dangerous to sail her without additional crew. It was provided in the landmark case of Bolton v. Madden [3] that "The adequacy of the consideration is for the parties to consider at the time of making the agreement, not for the court when it is sought to be enforced." Section 25 states the requirement of a legal consideration for a contract to be valid and mentions the exceptions for the same[15]. The ships captain, who could not find substitutes, promised the rest of the crew extra wages if they would work the ship back home. Similarly in Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd [1915], the Court defined it as, An act or forbearance of one party, or the promise thereof, is the price for which the promise of the other is bought, and the promise thus given for value is enforceable.. [2] One of the key elements of an agreement to be a contract is the existence of some sort of consideration. Subsequently, litigants attempted to use the exception (the presence of a new element) to escape the full rigour of the rule in Pinnels case as it became known. This was that the introduction of some new element at the creditors request, e.g., a robe, hawk or horse, or part payment at a different place or at an earlier date, was good satisfaction for the whole debt. It is arguable that a court in this case would review the adequacy of consideration since it is certainly reasonable to say that a contract calling for a borrower to repay a loan . The respondent instead of making the sales of the deeds in the favour of the appellant started disposing of the properties as gift deeds to respondent 2 and 3 and they further disposed of the properties to respondent 8 and others. Its main purpose is to persuade an interested party into a contract. We will also make reference to both English and Nigerian Case law to explain the principle of law under discuss. While "it is an elementary principle that the law will not enter into an inquiry as to the adequacy of consideration," 2 . Consideration is something of value that is exchanged in return for the promise of performance by the other party. 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. This question is only taken into account when the court is trying to establish the free consent of the promisor. Sample 2. Courts do not inquire into the adequacy of consideration, but (with some exceptions) do require the promisor to incur a legal detriment (the surrender of any legal right he or she possessesto give up something) in order to receive the bargained-for benefit. [10] It may surface during the agreement and it is up to the parties. Adequacy of Consideration Concerning this Case. A poor negotiation by one party does not make the contract void. Hence, the law requires consideration to be something of sufficient value, but not necessarily the full or adequate market value. Earl v. Peck, 64 N.Y. 596 (1876). The facts were:Pinnel sued cole in debt for 8, 10shillings due on a bond on November 11, 1600. If an act is done at the request of the promisor, such act will be treated as . They must each receive a benefit and each suffer a detriment. The matter of adequacy of consideration comes into the picture during the formation of the agreement and not when it is sought for enforcement. 66. Sample 1. In the first place, in view of the frequent refrain that consideration must be something of value in the eye of the law, it is essential to determine the meaning of this statement. 837. 63 Equity and Adequacy in School Funding John G. Augenblick John L. Myers Amy Berk Anderson Abstract Since 1971 most states have been subject to lawsuits seeking to reform their education funding systems. It further means that the court will not declare a contract to be invalid simply because one party has got a much better bargain than the other. The term sufficiency describes something that the courts can see of value that makes the bargain binding, whilst adequacy may describe the full value of something. Bhajan Singh . This action was brought to enforce the promise. Sufficiency of Consideration. However, consideration must be sufficient but need not be adequate. Oluboyo Taiwo Olamide is an undergraduate of law from the University of Benin, Benin city, Edo State. 210) p. 351. Apart from understanding what consideration is, it is equally important to be able to differentiate between an offer and an invitation to treat. Adding on to this, adequacy of consideration means that the value of consideration justifies the facts of the circumstances and necessities of the agreement. Bauch (2001) articulated the importance of giving consideration to the uniqueness of rural schools, such as those included in this study. 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. [4] Consideration is any act done or not done under the desire of the promisor by the promisee. Wilde B., did not find anything wrong if a person chooses to promise to pay a sum of money in order to induce another to perform that which he has already contributed with a third person to do. In the relatively recent case of New Zealand Shipping Co. V. A. M. Satter Ihwaite & Co. (1975) A.C. 154; (1974) 1 All E. R. 1015., which came before the House of Lords in its capacity as the judicial committee of the Privy Council;Facts of the case were as follows:A contract for the carriage of goods by sea between the carrier (the shipping company and the shipper {owner of the goods}, contained a clause limiting the liability of the carrier in case of any damage to the goods {expensive drilling machinery) before delivery to the consignee. If you are making plans to visit an area during the rainy season, then water repellent fabric will come to your aid. here, the respondents counsel had urged the court that there was no consideration for the respondents promise to transfer an ALSCON factory to the appellant since appellants consideration was constituted by the execution of only $1 million, in a contract involving property worth $410 million. [7] A case will be considered in this court only on the same theory upon which it was presented in the trial court. Adequacy of Consideration; Mutuality of Obligation. Even though both adequate and sufficient considerations involve a given value for a contract to be legal, there is a slim difference between them. adequacy and sufficiency 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 Continue reading Adequacy of Consideration, adequacy and sufficiency of consideration. [7]S. 25(f), The Indian Contract Act, 1872. And once the consideration is of some value in the eye of the law, even the courts have no jurisdiction to determine whether it is adequate or inadequate. In addition to this because the contract was done under the free will of the parties and the promisor, in this case, the appellant, was in the capacity to do so[9]. It is not a matter of question for the court after the contract has been made and the promises have been executed. Whilst consideration need not be adequate, it must, however, have some value in the eye of the law. 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 . It must comprise some element which can be regarded as the price of the defendants promise. [15]S. 25, The Indian Contract Act, 1872. Consideration is a value in the form of money, property, and act to perform or not to perform.
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