MGSC30H3 Chapter 8: Chapter 8 Notes
Document Summary
Consideration is an essential requirement for any contract not under seal. If the promise is gratuitous, the promise must be made in writing and under seal to be enforceable. Consideration must be legal and must have some value in the eyes of the law. The courts, however, will not consider the adequacy of the consideration unless it is grossly inadequate given the circumstances surrounding the transaction. Since consideration is the price that a person receives for his or her promise, the consideration must move from the promisee to the promisor. In cases where the consideration is not specified, and a request is made for goods or services, the consideration will be determined by the courts at a reasonable price. The courts have permitted the injurious reliance on the part of a party to be used as a defence in cases where a plaintiff attempts to enforce an original agreement that had been altered by a gratuitous promise.
