Explain Adequacy And Sufficiency Of Consideration

NotesQuizObjective Test

Consideration must be Sufficient not Adequate

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

Thomas v Thomas

Hence the saying 'Caveat Emptor' - Buyer beware!

Consideration must also be a legal and possible performance

Specific Circumstances

  1. Promise to Pay Extra (for doing existing work)

    This extra payment can't be sued for if not paid as the work you did was not sufficient - it was just existing work

    Stilk v Myrick

    Contrast this with doing extra work for extra pay - then you can sue for the payment if not paid as your consideration is sufficient - you did more work

    Hartley v Ponsonby

    One slight exception is you can do your existing work and still sue for extra agreed money if the deal was mutually beneficial

    Williams v Roffey Bros

  2. Promise to Accept Less

    This is you saying pay me half and I'll forget the rest - and then after receiving half - you asking for the other half. You can actually do this! Because your debtor has not offered any consideration for the reduction by half so the agreement wasn't legal

    So how can the debtor add in some consideration and thus be able to rely on this agreement?

    1) Pay the half Earlier
    2) Pay the half differently (in-kind)
    3. Pay the half at a different location
    4. Get a 3rd party to pay the half

    Also there is the Equitable Doctrine of Promissory Estoppel which says you can rely on the agreement if you relied on the agreement and the creditor knew you were relying on the agreement (to only pay half)

  3. Part payment of a debt from a third party

    If a debtor accepts less consideration as full consideration from a third party, he cannot demand more after he has accepted less because part payment by a third party is good consideration for a promise to discharge a debt.

NotesQuizObjective Test