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Along with an intent to create to legal relations and a binding agreement, common law has developed a doctrine of consideration, which is required for there to be a valid contract. It is said that consideration arises from the idea of reciprocity; that in order for a contract to be biding, both parties should provide something in return for something else. The doctrine was well noted in the case of Currie v Misa , where it was said that:
A valuable consideration, in the sense of the law, may consist either in some right, interest, profit, or benefit accruing to the one party, or some forbearance, detriment, loss or responsibility, given, suffered, or undertaken by the other.
Professor Atiyah suggested that the courts never intended to create such a controversial doctrine, though now it exists, a few points must be noted.
Consideration must move from the promisee
Firstly, consideration must move from the promisee. That is, it must be provided by one party, but it need not travel to the other party. For example, I could promise to give you my car if you gave £7000 to a charity.
Consideration must be of some value
Secondly, the law must recognise consideration as being of some value in the eyes of the law. This may not necessarily be just economic value though. In Hammer v Sidway [1891, America], good consideration was provided by not drinking or gambling for a certain time period; however in White v Bluett , there was no consideration in not irritating the promisor...
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