Consideration is a controversial requirement for contracts under common law (for example money). It is not necessary in civil
law systems, and for that reason has come under increasing criticism. The idea is that both parties to a contract must bring
something to the bargain. This can be either conferring an advantage on the other party, or incurring some kind of detriment
or inconvenience. Three rules govern consideration.
-Consideration must be sufficient, but need not be adequate. For instance, agreeing to buy a car for a penny may constitute
a binding contract. While consideration need not be adequate, contracts in which the consideration of one party greatly exceeds
that of another may nevertheless be held invalid for lack of sufficient consideration. In such cases, the fact that the consideration
is exceedingly unequal can be evidence that there was no consideration at all. Such contracts may also be held invalid for
other reasons such as fraud, duress, unequal bargaining power, or being contrary to public policy. In some situations, a collateral
contract may exist, whereby the existence of one contract provides consideration for another. Critics say consideration can
be so small as to make the requirement of any consideration meaningless.
-Consideration must not be from the past. For instance, in Eastwood v. Kenyon, the guardian of a young girl raised a loan
to educate the girl and to improve her marriage prospects. After her marriage, her husband promised to pay off the loan. It
was held that the guardian could not enforce the promise as taking out the loan to raise and educate the girl was past consideration,
because it was completed before the husband promised to repay it.
-Consideration must move from the promisee. For instance, it is good consideration for person A to pay person C in return
for services rendered by person B. If there are joint promisees, then consideration need only to move from one of the promisees.
Civil law systems take the approach that an exchange of promises, or a concurrence of wills alone, rather than an exchange
in valuable rights is the correct basis. So if you promised to give me a book, and I accepted your offer without giving anything
in return, I would have a legal right to the book and you could not change your mind about giving me it as a gift. However,
in common law systems the concept of culpa in contrahendo, a form of 'estoppel', is increasingly used to create obligations
during pre-contractual negotiations. Estoppel is an equitable doctrine that provides for the creation of legal obligations
if a party has given another an assurance and the other has relied on the assurance to his detriment. A number of commentators
have suggested that consideration be abandoned, and estoppel be used to replace it as a basis for contracts. However, legislation,
rather than judicial development, has been touted as the only way to remove this entrenched common law doctrine. Lord Justice
Denning famously stated "The doctrine of consideration is too firmly fixed to be overthrown by a side-wind."