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Consideration in Contract Law for SQE1

Part of our SQE1 Contract Law guide → View the full SQE1 Contract Law guide

08 Apr 2026

Consideration is the price of a promise. Master sufficiency vs. adequacy, the Williams v Roffey practical benefit exception, and promissory estoppel for SQE1 exam success.

Contract Law > Consideration in Contract Law

Consideration is the price of a promise — without it, an agreement is generally not enforceable as a contract under English law. SQE1 tests your understanding of the rules on what constitutes valid consideration and the exceptions that have developed through case law. This topic sits at the heart of contract formation and frequently overlaps with other areas. Within the broader Contract Law framework, understanding consideration is critical to answering any question about whether a binding contract exists.

What Is Consideration?

Candidates frequently lose marks on SQE1 by treating past consideration as valid consideration — but the rule is simple: consideration must move at the time of the promise or after, never before. This temporal distinction is tested repeatedly.

Consideration is something of value given by each party to a contract in exchange for the other party's promise. It is the element that distinguishes a binding contract from a gratuitous promise (a gift). English law requires consideration for every simple (non-deed) contract.

The classic definition comes from Currie v Misa (1875): consideration is "some right, interest, profit or benefit accruing to one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other."

Key Principles for SQE1

Sufficiency vs. Adequacy

  • Consideration must be sufficient but need not be adequate.: This means:

  • Consideration must have some recognisable legal value — it must be something the law recognises as valuable (Thomas v Thomas, Chappell & Co v Nestle)

  • The court will not assess whether the exchange is fair — £1 can be consideration for a house, and the law does not intervene

  • Common examples: forbearance from exercising a legal right, return promises, even nominal payments

Exam tip

Students often confuse adequacy with sufficiency. Remember: the court does not care if the deal is a bad bargain. The question is whether there is recognisable value, not whether it is a fair price.

Past Consideration

Past consideration is not good consideration. If the act was performed before the promise was made, it cannot support the promise (Re McArdle).

Exception — Lampleigh v Brathwait Rule: Where the act was done at the promisor's request, the parties understood payment would follow, and payment would have been legally enforceable, past consideration may be good consideration (Pao On v Lau Yiu Long).

Performance of an Existing Contractual Duty

Traditional Rule (Stilk v Myrick): Generally, performance of an existing contractual duty is not good consideration for a new promise. If A is already contractually bound to do X, then promising to do X in exchange for payment by B gives B nothing new.

Exception: If the promisee provides something beyond the existing duty, that is valid consideration (Hartley v Ponsonby).

Practical Benefit Exception (Williams v Roffey Bros): This is the most important modern development. A promise to pay extra for performance of an existing contractual duty may be enforceable where:

  1. The promisor obtains a practical benefit from the continued performance
  2. There is no economic duress

This modernises the law and recognises that in construction and commercial contexts, sometimes a promise to pay more is made because the promisor genuinely benefits from ensuring completion.

Quick Comparison Table

| Scenario | Rule | Valid Consideration? | |---|---|---| | Forbearance from legal right | Sufficiency rule | Yes | | Nominal sum (£1 for house) | Adequacy irrelevant | Yes | | Act done before promise | Past consideration | No (except Lampleigh v Brathwait) | | Performance of existing duty | Stilk v Myrick | No | | Extra work beyond duty | Beyond existing duty | Yes | | Extra payment for performance + practical benefit | Williams v Roffey | Yes (if no duress) |

Part Payment of a Debt

General Rule: Payment of a lesser sum does not discharge the full debt (Pinnel's Case 1602; Foakes v Beer 1884). If A owes £100 and pays £80, the creditor can still recover the £20.

Exceptions:

  • Payment by a third party (different from debtor paying)
  • Payment in a different form (e.g., goods instead of cash)
  • Payment at a different time or place (agreed in advance)

Promissory Estoppel

Definition: Where a party makes a clear and unequivocal promise to waive or vary their strict legal rights, and the other party relies on that promise, the promisor may be estopped from going back on the promise (Central London Property Trust v High Trees House).

Critical Rules:

  • It operates as a shield, not a sword — it is a defence, not a basis for a new claim (Combe v Combe)
  • It is generally suspensory, not extinctive — when circumstances change, the promisor can resume full rights with reasonable notice (Tool Metal Manufacturing v Tungsten Electric)
  • The promisee must have relied on the promise
  • The promise must be clear and unequivocal

How This Appears in SQE1 Questions

SQE1 questions test whether consideration is valid in a given scenario. SQE1 questions may test this distinction repeatedly. Common traps include:

  • Accepting past consideration as valid — forget Lampleigh v Brathwait and you'll miss the exception
  • Overlooking the Williams v Roffey practical benefit rule — forgetting that modern law recognises practical benefit as consideration
  • Confusing promissory estoppel with consideration — estoppel is a shield (defence), not a cause of action
  • Missing the part payment rule — students often assume part payment discharges the debt without considering the exceptions

Common Mistakes Students Make

  • Treating past consideration as valid — it is not, except under the Lampleigh v Brathwait exception where the act was requested.
  • Forgetting Williams v Roffey Bros and assuming performance of an existing duty can never be good consideration.
  • Confusing promissory estoppel with consideration — estoppel is a defence, not a basis for enforcing a new promise.
  • Overlooking the part payment rule (Foakes v Beer) and its exceptions for third parties, different form, or different time/place.
  • Using promissory estoppel as a sword — it is a defence only, not a basis for claiming damages.

Want to test your understanding of consideration? Try a few SQE1-style questions below before moving on.

Quick Summary

  • Consideration must be sufficient but not adequate: it must have recognisable legal value, but fair market value is irrelevant.
  • Past consideration is not valid, except under the narrow Lampleigh v Brathwait exception (requested act where payment understood and legally enforceable).
  • Performance of existing duty is not good consideration (Stilk v Myrick), unless the promisee provides something extra or the promisor obtains a practical benefit (Williams v Roffey Bros).
  • Part payment does not discharge a debt, but exceptions exist: third-party payment, different form or different time/place.
  • Promissory estoppel is a shield, not a sword — it prevents the promisor from enforcing strict legal rights after making a clear promise and the promisee has relied on it, but it is generally suspensory.

Want to test this now? Try a few SQE1-style questions below before moving on.

Test Yourself

Test yourself

Quick check questions based on this article.

Question 1

Scenario

A supplier promises to deliver 200 units of stock to a retailer by Friday. The retailer, anxious about timely delivery, offers the supplier an additional £500 if the stock arrives by Wednesday instead. The supplier delivers the stock on Wednesday. The retailer's warehouse manager confirms that the stock arrived in good condition. The retailer now refuses to pay the additional £500, arguing that the supplier was already contractually obliged to deliver by Friday. The supplier operates from a warehouse approximately ten miles from the retailer's premises. The retailer had previously experienced delivery delays with a different supplier, which caused stock shortages. The original contract was agreed after two rounds of negotiation over email. The supplier's delivery driver confirmed that the early delivery was arranged specifically at the supplier's initiative.

Is the retailer likely to be obliged to pay the additional £500?

Question 2

Scenario

A catering company enters into a contract with an events organiser to provide food for a corporate dinner for £8,000. Two weeks before the event, the catering company informs the organiser that its head chef has resigned and it may not be able to deliver the agreed menu. The organiser, unable to find an alternative caterer at short notice, offers to pay an additional £2,000 if the catering company fulfils its obligations under the original contract. The catering company recruits a temporary chef and delivers the agreed menu on the night of the event. The organiser refuses to pay the additional £2,000, arguing that the catering company simply did what it was already contracted to do. The events organiser's assistant had separately noted that several important clients were attending the dinner. The events organiser has been in business for eight years and typically organises between 10 and 15 corporate events per year. The catering company is a family-run business that has provided catering for three previous events organised by the same company. The temporary chef recruited by the catering company had previously worked at a Michelin-starred restaurant.

Is the catering company likely to be entitled to the additional £2,000?

Question 3

Scenario

A landlord leases commercial premises to a restaurant owner for £4,000 per month. After the restaurant suffers a significant drop in revenue, the landlord agrees in writing to reduce the rent to £2,500 per month "until business improves." The restaurant's revenue recovers after eight months, but the restaurant owner continues to pay only £2,500 per month. The landlord writes to the restaurant owner giving one month's notice that full rent of £4,000 will be required from the following month. The restaurant owner argues that the landlord cannot reinstate the full rent because the written agreement permanently varied the lease. The original lease contains no clause requiring variations to be in writing. The landlord has not claimed any arrears for the eight-month period during which reduced rent was paid. The restaurant owner's solicitor advises that the landlord's written concession may have created a binding variation, but notes that any advice must be accurate and in the client's best interests under SRA Principle 7. The landlord's decision to reduce the rent was communicated to the restaurant owner during a face-to-face meeting at the premises.

Which of the following best describes the landlord's right to reinstate the full rent of £4,000 per month?

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