Case name: Thomas v Thomas (1842) 2 QB 851; 114 ER 330
Jurisdiction: The Queen’s Bench Division (QBD)
What is the case about?
The case of Thomas v Thomas (1842) is a well-known case that threw light on the principle of “sufficiency of consideration”. It emphasized that “consideration must be sufficient, but need not be adequate”.
Section 10 of the Indian Contract Act says that an agreement in order to be enforceable by law must have a valid and lawful consideration, among other things. Consideration is one of the crucial prerequisites for the validity of a contract. But there are many case laws that deal with what should be amount of this consideration. Thomas v Thomas is one of them.
Facts of the case
In the case of Thomas v Thomas (1842), the claimant’s husband expressed a wish that after his death, the claimant should have the use of the house for the rest of her life. This was not written by way of a will though.
After his death, the executors of his estate agreed to allow his wife to occupy the house, firstly because of her husband’s wishes and, secondly, on payment of £1 per annum by her.
Issues raised in Thomas v Thomas
Should someone be allowed to stay in a house that is not his or her legal property?
The issue raised in the instant case was whether the payment of merely £1 per annum would be as good as paying consideration to occupy the house.
Since the claimant’s husband did not write a will, there had to be the existence of some consideration in order to give effect to the agreement.
Contentions before the Court
It was critical to determine whether there was a contract between the wife and the legal owners of the house. The husband left no written will, and the wife was allowed to give a payment amount that was insufficient to support the expense of living in that house. The wife stated that she also kept the house in good repair, which should have been enough to offset the cost of living there.
Sufficiency and adequacy explained
“The consideration has to be sufficient but the adequacy of the consideration is immaterial.”
This means that the law requires the parties to have entered into a contract in which each side has supplied something of value that the Courts can recognize. The Courts are often unconcerned with whether this is the entire market value or whether or not the contract is a fair bargain. That is up to the parties to negotiate for themselves.
Judgement of the Court (Thomas v Thomas)
Consideration must bring some benefit to the promisor or some detriment to the promisee, but neither benefit nor detriment must be of significant value. Indeed, very little money can also be exchanged for highly valuable promises.
Here, the Courts decided that the desire of the deceased husband for his wife to live in the house was not part of the consideration but that the paying of £1 per annum by her was. Thus, the contract was enforceable even though the rent was nowhere like a commercial rent for the property. And without such consideration, the transaction was only a voluntary gift.
It was well established that the Courts will not inquire into the adequacy of consideration: only its sufficiency will be considered. Natural love and affection cannot be considered adequate or sufficient, in and of itself, because they have no economic value. And in addition, the agreement was not written.
Therefore, even a small sum of money was sufficient.
Hence, Mrs. Thomas’s promise to pay £1 p.a. as ground rent and to keep the house in good condition was held to be a valid consideration for the agreement. The Court ordered her husband’s executors to give her the right to occupy the house for life.
Conclusion drawn from Thomas v Thomas case
Consideration is what one party provides to the other in an agreement. The consideration so provided does not have to be of equivalent value to what one is getting in return from the agreement. It just has to be of some legal value. Therefore, it may be a promise to do or not to do something, a provision for payment, or an item in exchange for what one is getting in the promise.
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