Contract, Consideration and Consistency

Abstract

This article seeks to continue the debate on the proper role of consideration in the formation of executory contracts at common law. It first attempts to identity the place of consideration within the theoretical framework of contract by outlining the arguments that have been made regarding the possible functions of consideration and how they correspond with the broad theories of contract. Two possible functions of consideration are identified. The first is that consideration is an indicator of an exchange. The second is that consideration is evidence that a promise or promises were made with due deliberation and with an intention that the promise or promises would be legally binding. The article then compares these two possible functions with the application of the doctrine of consideration and concludes that the evidential function is the only possible function that is consistent with the application. It then concludes by arguing that if consideration has an evidential function, alternative forms of evidence should be accepted in substitution for consideration and that therefore consideration should not be an essential element of the formation of contract. It also argues that if consideration was seen in this way, most of the problems commonly associated with the doctrine would be resolved.