• Valuable consideration (as opposed to nominal consideration)

    Consideration of some economic value, as opposed to consideration which is merely nominal. For a contract to be valid, consideration must be ‘sufficient’, and as such, valuable consideration is often used as a means by which to determine if a contract is valid, by asking if the consideration is ‘valuable’ in any sense (not necessarily monetary) to one or both parties. Valuable consideration is not necessarily consideration that a market would place value on, but one that the parties would and have placed value on in requesting and/or accepting it.

    In the case of Chappell & Co Ltd v Nestlé Co Ltd [1960] AC 97, Lord Somervell expressed that ‘valuable’ consideration exists where the promisor places value on it or requests it, and this can be distinguished from an item’s actual constructive value:

    A contracting party can stipulate for what consideration he chooses. A peppercorn does not cease to be good consideration if it is established that the promisee does not like pepper and will throw away the corn.” – Lord Somervell, Chappell & Co Ltd v Nestlé Co Ltd [1960] AC 97

    Further, in the famous case of Carlill v Carbolic Smoke Ball Co, the inconvenience of using the smoke ball was taken to be adequate consideration for the promise of money where it was ineffective in preventing illness.

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