Section A

Which of the following is an example of 'consideration' in contract law?

Answer options:

A promise to pay £10 for a car.

A promise to stop complaining.

Performing a public duty, such as attending court under a subpoena.

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).

Question 42 All questions Question 44

Practice the full ACCA LW — Corporate and Business Law Practice Exam 6

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