ExpertMedium1 markMultiple Choice
ACCA · Question 43 · The law of obligations
Section A
Which of the following is an example of 'consideration' in contract law?
Section A
Which of the following is an example of 'consideration' in contract law?
Answer options:
A.
A promise to pay £10 for a car.
B.
A promise to stop complaining.
C.
Performing a public duty, such as attending court under a subpoena.
D.
A promise to pay for work that was completed last week.
How to approach this question
Apply the rules of consideration: it must be sufficient (have some economic value) but need not be adequate (fair market value).
Full Answer
A.A promise to pay £10 for a car.✓ Correct
Consideration is the 'price' paid for a promise. It must have some value in the eyes of the law (sufficient), but it does not have to be a fair market price (adequate). Therefore, £10 for a car is valid consideration (Chappell & Co v Nestle).
Common mistakes
Thinking consideration must be a fair price (adequate).
Practice the full ACCA LW — Corporate and Business Law Practice Exam 6
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