Consideration in English Law - Illusory Consideration

Illusory Consideration

There must be some kind of connection between a promise and the consideration offered to support the promise. It is no consideration to "refrain from a course of conduct which it was never intended to pursue" (Arrale v Costain Civil Engineering Ltd 1 Lloyd's Rep 98). The consideration must have been at least an inducement to enter into the promise.

This requirement also imposes a restriction on conditional gifts. This test is an objective test - whether a reasonable person in the position of the offeree would perceive it as a gift as opposed to an offer. For example, the payment of $10,000 for the switching of a television channel is not met with consideration.

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