What Constitutes Valid Consideration in a Promise?

Question from Baby, What Constitutes Valid Consideration in a Promise?

Answer from AI:

Consideration is a fundamental concept in contract law that refers to something of value that is given in exchange for a promise. It is one of the essential elements required for a contract to be legally binding. In Canada, as in many other jurisdictions, consideration must be present for a contract to be enforceable. Below, we will examine whether there is valid consideration in the given scenarios.

1. Promise to a Child for Passing Exams

• A person tells their child, “if you pass your exams, I will take you into the business.”

Consideration: The child’s effort and time spent studying to pass the exams could be seen as consideration for the parent’s promise.

2. Promise to a Child for Failing Exams

• The same person, to lessen the anxiety of their child, tells them, “If you fail your exams, I will take you into the business.”

Consideration: This scenario lacks consideration because failing an exam is not an act, forbearance, or detriment undertaken by the child; it is not a benefit to the parent or a detriment to the child that can be considered valuable in the legal sense.

3. Promise Regarding Hair Restorer

• A person offers to pay another individual $100 if, having bought the first person’s hair restorer, the second individual suffers loss of hair within three months of using it. The second individual uses the lotion and becomes bald in two weeks.

Consideration: The purchase of the hair restorer and the potential risk of using the product could be seen as consideration for the promise of compensation.

4. Promise of Payment for Becoming Bald

• A person offers to pay $400 to another individual if they become bald within six months. The second individual becomes bald in two weeks.

Consideration: If the baldness is a natural occurrence and not a result of any action taken by the individual to fulfill the condition, there may be no consideration. However, if the individual took action to become bald to fulfill the condition, that action might be seen as consideration.

5. Offer to Give Away a Porsche

• A person living in London offers to give their nephew’s Porsche to another individual if the second individual, who lives in Scotland, collects the car from outside the first person’s house.

Consideration: The effort and potential cost of traveling to collect the car could be seen as consideration for the promise of receiving the Porsche.

6. Offer to Give Away a Derelict Car

• The same person living in London offers to give their derelict car to another individual if the second individual, who lives in Scotland, will collect the car from outside the first person’s house.

Consideration: Similar to the Porsche scenario, the act of collecting the car serves as consideration, even if the car is derelict.

7. Promise to Transfer Land After Building a House

• A person promises another individual that they will execute a deed of gift transferring their land to the second individual; the second individual, with the first person’s consent, goes onto the land and builds a house on it.

Consideration: The second individual’s action of building a house on the land, which improves the property and is a significant expenditure of effort and resources, is a clear form of consideration for the promise of the land transfer.

In each of these scenarios, the presence of consideration depends on whether there is a benefit to the promisor or a detriment to the promisee that is bargained for in exchange for the promise. It is important to note that the adequacy of consideration is not typically scrutinized by the courts; as long as there is some value in the eyes of the law, it may suffice.

For personalized advice, it is recommended to consult with a legal professional who can provide guidance based on the specifics of the situation and the applicable laws in Canada. Legal advice is necessary to ensure that any actions taken are legally sound and to understand the full implications of any agreements made.