What is the role of consideration in English contract law?

Pursuant to the common law’s economic view of contracts, the English conception of contracts requires the exchange of reciprocal obligations. It is frequently said that, historically, the fundamental purpose of English contract law was to facilitate transactions in the marketplace. It is in this context the requirement of consideration must be viewed.

In order to be legally enforceable, a contract (or contractual variation) must be ‘supported by consideration’, unless made by deed. It is not enough that an offer, seriously made by one party with the intention to create legal relations, has been accepted by the other party — both parties must undertake reciprocal obligations. In other words, both contracting parties must provide consideration. Consideration can be found in the provision of a benefit or by undertaking a detriment (Currie v Misa); it must be sufficient, but need not be adequate (Chappel v Nestle).

All legal systems accept that it is undesirable to enforce all seriously intended promises. In contrast to countries following the civilian legal tradition, gratuitous promises — generally — are not legally enforceable in England. Alongside an intention to create legal relations, consideration provides the distinctly English ‘threshold’ criterion that demarcates where moral obligations end and legal obligations begin.

Answered by Marius B. G. Law tutor

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