Sufficiency of Consideration CASES
In English contract law, sufficiency of consideration refers to the legal requirement that consideration must have some value recognised by law. It does not need to be equal or fair in economic terms, merely legally sufficient.
Definition and Principles
Consideration must be something of legal value—however minimal—such as money, goods, services, or a legally enforceable promise. Courts generally do not examine fairness or adequacy, only whether consideration is legally recognised.
Common Examples
- A nominal payment (e.g., £1 per year) is sufficient.
- “Peppercorn rent” – a symbolic payment (e.g., a single peppercorn) that meets legal sufficiency requirements despite negligible value.
- Giving up a legal right, regardless of economic worth.
Legal Implications
- Ensures contracts are enforceable provided minimal legal value is exchanged.
- Distinguishes enforceable promises from mere gratuitous promises or gifts.
Practical Importance
Understanding sufficiency helps parties form valid, enforceable contracts, ensuring clarity in what constitutes legally valid consideration.
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Nestlé offered records for a discounted price plus three chocolate wrappers. The copyright owner challenged this. The House of Lords ruled the wrappers, though of trivial value, formed part of the legal consideration, affirming the principle that consideration must be sufficient but need not be adequate. Facts Chappell & Co Ltd, the appellants, owned the copyright in a piece of music titled ‘Rockin Shoes’. The Nestlé Co Ltd, the respondents, were manufacturers of milk chocolate. To promote their chocolate sales, Nestlé entered into an agreement with a company that manufactured gramophone records of ‘Rockin Shoes’. Nestlé then advertised these records
