Prepare answers to the following questions: - Assignment Example

Task For a contract to be considered as binding by a court of law, the essential element of consideration must be met. Consideration is concisely defined as “some right, interest or benefit accruing from one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other” (Currie vs. Misa (1875) LR 10 Exch 153). This means that for a contract to become complete there must be some degree of benefit or loss accruing to the parties. For example, an agreement between X and Y, for X to give Y a mobile phone will not be amount to a valid contract unless there is something to be offered in return.

The essential rule of contract that consideration need not be adequate but sufficient expounds the position that courts do not enforce the adequacy of consideration, but rather its sufficiency. If consideration was sufficient and present, courts will not dwell on the value of the consideration (Stone 112). For example, if X and Y enter into a contract for the sale of a car for $20, whereby the cars actual is worth $1000, the court will render the consideration sufficient despite the value of the consideration being inadequate and absurd.

The rule emanates from the legal principle of freedom of contract where parties are free to include terms, duties and responsibilities in a contract as they deem fit (Lu 7). Because of this freedom, parties to a contract may stipulate whatever rules they would like to be bound by. Thus what lay people may consider as too little or absurd, the courts will uphold such payments as it is not their duty to speculate on the worth of the contract provided there is some value. It is for this reason that the court in Thomas v Thomas (1842) found that the undertaking to pay £1 per annum in rental fees was plainly sufficient to sustain the promise of a right to live in a house.

Similarly, in Chappell & Co.LTD vs. Nestle Co LTD (1959) All ER 701 the court held that chocolate wrapping were sufficient to amount into good consideration. Therefore, it is evident fro the foregoing that consideration need not be adequate but sufficient because will not rescind a contract merely because a party made a bad bargain.2For a binding contract to suffice, the essential elements on a contract have to be satisfied. These essentials include, offer, acceptance, consideration, capacity, certainty and the intention to create legal rights.

There was a valid offer when Ben accepted to loan Jennifer a thousand pounds. In Harvey v Facey [1893] it was established that the courts should look at the intention of the parties and other evidence to determine the time when a valid offer capable of being accepted was made. Jennifer accepted the offer when she took the money, which acted as a valid consideration, to invest in her business. This resulted to a binding contract between the parties as the elements of offer, acceptance, consideration, capacity and the intention to create legal rights were met.

However, the terms of the offer were changed upon Ben accepting payment of the sums owed by Jennifer on installments. This meant that the conditions of the offer had changed and thus Ben could not turn around and ask for the reminder of the money immediately. The contract could only be breached if Jennifer was unable to honor the installments. Based on this therefore, Ben cannot successfully force Jennifer to pay the money immediately.There was a valid contract between Elsie and Jennifer whose acceptance was based on Jennifer’s performance of the household chore of cleaning her house for six months.

The contract was conditioned upon Elsie paying Jennifer a consideration of one thousand pounds upon the completion of the task. Elsie’s failure to pay Jennifer the agreed sum amounts to a breach of contract, upon which Jennifer can successfully sue for performance and an award of damages. In light of this therefore, Jennifer can force Elsie to pay her the remaining five hundred pounds. BibliographyBolton v. Madden (1873) L.R. 9 Q.B. 55Chappell & Co.LTD vs. Nestle Co LTD (1959) All ER 701Currie vs.

Misa (1875) LR 10 Exch 153Dunlop Pneumatic Tyre Co. Ltd. v. Selfridge & Co. Ltd. [1915] AC 847Edmonds v Lawson [2000] QB 501Harvey v. Facey, [1893] A.C. 552Pharmaceutical Society of Great Britain v Boots Cash Chemists [1953] 2 WLR 427Thomas v. Thomas (1842) 2 Q.B. 851, 114 E.R. 330White v Bluett (1853) 23 LJ Ex 36Bernstein, Eliot D, (2008). ‘Freedom of Contract’ George Mason Law & Economics Research Paper No. 08-51. Available at Graw, Stephen, (2008) An Introduction to the Law of Contract Law Book: Khoury, D and Yamouni Y, (2007), Understanding Contract Law LexisNexis:Lilleholt K, (2011), Model Rules of European Contract Law.

From Draft Common Frame of Reference to Draft Optional Instrument (online) Available at Lu S, (2003) Gap-Filling and Freedom of Contract (online) Available at Pentony, B et al, (2009) Understanding Business Law LexisNexis:Schwartz A, Robert E., (2003) ‘Contract Theory and the Limits of Contract Law’ Yale Law Journal, Vol. 113, 2003Schwartz A, Robert E, (1991), ‘Commercial Law: Principles And Policies’ 204-224 Steyn, J, (1997) ‘Contract law: fulfilling the reasonable expectations of honest men’ 113 LQR 433Stone R, (2009), The Modern Law of Contract, London: Cavendish publishing LTD