The Doctrine of Consideration as a Key Determinant in the Law of Contract

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The doctrine of consideration is a key determinant in the law of contract. The application of the principles of consideration operates to transform a mere promise into a legally binding contract. The underlying rationale for the requirement of consideration in the law of contract is predicated on the theory that each party to a contract will give up something of value in exchange for a benefit. The evolution and development of the doctrine of consideration over the years have given rise to a number of judicial decisions with the result that many jurists now doubt the necessity of the doctrine of consideration in the law of contract. The impact of the evolving doctrine of consideration is enunciated by Lord Goff in the modern case of White v Jones. The learned justice made this observation: ‘Our law of contract is widely seen as deficient in the sense that it is perceived to be hampered by the presence of the unnecessary doctrine of consideration.’The original concept of the doctrine of consideration was demonstrative of a quid pro quo theory. The doctrine was defined in terms of ‘benefit’ and ‘detriment’. An oft-quoted definition is attributed to Lord Lush in the nineteenth-century case of Currie v Misa in which Lord Lush said of the doctrine of consideration: ‘A valuable consideration in the sense of law, may consist of some right, interest or profit, or benefit accruing to one party and some forbearance, detriment, loss or responsibility suffered, or undertaken by another.’2Consideration is the price or value of a promise. By virtue of the doctrine of consideration, all contracts unless made by deed are required to have some sort of consideration. A strict interpretation of valuable consideration usually meant money or money’s worth. However, some confusion appears to have tainted the distinction between what amounts to adequate consideration and inadequate consideration. Even the classic approaches to these concepts have been contradictory.The modern approach to the doctrine of consideration reflects a shift away from the strict requirement of ‘detriment’ and ‘benefit’ concepts.