In ensure that the offeror and acceptor promised to

In order to make a contract, these has four element
is important which is offer, acceptance, consideration and intention to create
legal relation. In this part, we want to discuss about consideration. The principle
of consideration in laws is want to ensure that the offeror and acceptor promised
to exchanged something that has similar value in viewpoint of law. The consideration
in a contract has two functions which is evidentiary function and deliberative
function. The consideration has many different sections like executed
consideration, past consideration, without consideration and others. Consideration
only present when the parties have means to exchange. However, in our case
study, we will emphasize to explain section which is consideration must be
sufficient but not be adequate. This is means that the parties agree to make a
contract is not just a simply oral promises, is exchange the similar value
between them. If the parties in contract is agree to exchange value, the law
will take it as consideration adequate.

Analysis Legal Issues

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The case study is describe Katherina has bought an
old brooch at an antique store for RM5.00. At the first, Katherina don’t know
the brooch is a valuable antique. Katherina because in need of money so she
sold the old brooch to Katty for RM10.00. Katty soon found that the old brooch
is worth RM 10,000.00. Katherina tendered RM10.00 back to Katty and demanded
the return of the old brooch. Whether the contract between Katherina and Katty
is invalid because of the consideration is inadequate? Whether the Katherina
can go back her promise in her contract between Katty?


            Under Section 26
Explanation 2 of Contracts Art (CA) 1950, an agreement is not void merely
because the consideration is inadequate. The consideration sufficient must have
some monetary value. However, consideration need not be adequate so the
consideration can below the market price. Besides that, under Section 2(d) of
CA, states that when promisee has done or abstained from doing, the act or
abstinence or promise is called a consideration for the promise. In the case
study, Katherina don’t know the value of the old brooch was worth RM10000. After
that, she because in need of money so she sold the old brooch to Katty for
RM10.00. Hence, Katherina consideration is sufficient but not adequate because
she voluntarily to sell the old brooch to Katty without any coercion. Katherina
also can’t go back her promise with tendered RM10.00 back to Katty and want the
old brooch return.


Chappell v Nestle (1960 HL)

            Chappell & Co is a
company that publish music and manufacture the piano. Chappell & Co owned a
copyright of records. Nestle company hold a promotion whereby a person sent in
3 chocolate bar wrappers and a postal order 1 shilling for 6d. The Nestle
Company will send back a record which value at 6 shillings. Chappell found that
their owned the copyright in one of the record that Nestle offer to customer.
Chappell dispute the right of Nestle violate their copyright by offer the
records. Nestle declare that offer these records to customer at a discounted
price is because that the wrappers of chocolate bars is worthless.

            According to the
section 8 of the Copyright Art 1956, if retailers gave notice to the copyright
holders of the ordinary selling price and paid them 6.25% of profit, the
retailers was not violate the copyright. Chappell
argued that the value was to be calculated on the 1/6d plus the value of the wrappers. Nestle gave
the notice to Chappell and stated that the ordinary selling price was the 1
shilling 6d and three chocolate bar wrappers. The legal issue was whether the
wrappers were consideration for the sale of records or whether they were merely
a qualification for buying the records. Consequences, Chappell obtain the prohibition
that Nestle can’t sell the records to customer through postal order. This is
because that Nestle Company wasn’t complying with the section 8 of the
Copyright Art 1956.

White v Bluett case

Mr Bluett lent
his son a lot of money before he die. The executor of Mr Bluett’s estate was Mr
White. When Mr White executes the Mr Bluett’s testament, he sued the Mr Bluett’s
son to pay back the outstanding payment. The son’s defender argued that the
outstanding payment was not necessary to render the promissory note
ineffective. If the son can stop complaining about Mr Bluett how to distribute his
property among the other members of family in his testament.

The legal
issues is the son can stopped to complain about his father testament plan and
the son is satisfy the requirement of consideration in the contract.  If the son can prove he will stop complain, he
can release from the requirement to repay the debt owned from his father. The
son’s promise was too vague to have a legally recognizable value. Hence, the
court held that promise doesn’t counted as real consideration. This is because
that the son stops complaining were not having any economy value. We can
through this case know that the exchange consideration must have value and
tangible. Thus no contract existed between the son and father.


            In the conclusion, the contract
between Katterina and Katty is a valid contract. This is because that Katherina
consideration is sufficient but not be adequate so the agreement is not void.
Katterina also can’t go back her promise with Katty in the contract. This is
because that Katterina is promise to sell the old brooch to Katty. The act is
called consideration for promise can Katterina can’t to revoke her promise with