Inadequacy of Consideration and Undue Influence

Introduction:
Inadequacy of consideration refers to a situation where the value of the consideration given by one party to another is significantly less than the value of the consideration received by the first party. Undue influence refers to a situation where one party exercises excessive control or pressure over another party, thereby compelling the second party to enter into a contract against their will. This essay examines the relationship between inadequacy of consideration and undue influence.

Inadequacy of Consideration as Evidence of Undue Influence:
Inadequacy of consideration can be an indicator of undue influence, particularly in situations where the degree of inadequacy is extreme. This is because the party offering the inadequate consideration may be taking advantage of the other party's vulnerability or lack of bargaining power, thereby exerting undue influence over them.

Mere Pecuniary Inadequacy of Consideration:
However, mere pecuniary inadequacy of consideration will not generally render a contract unfair for enforcement. This is because the law assumes that parties to a contract are in the best position to judge the adequacy of consideration, and are free to make their own choices. As such, the court will not usually interfere with a contract simply because the consideration offered by one party is less than the value of the consideration received by the other party.

Degree of Inadequacy:
The degree of inadequacy is therefore crucial in determining whether a contract is unfair for enforcement. In situations where the degree of inadequacy is extreme, the court may conclude that the party offering the inadequate consideration has exercised undue influence over the other party. In such cases, the contract may be voidable at the option of the party who was subjected to undue influence.

Conclusion:
In conclusion, inadequacy of consideration can be an indicator of undue influence in situations where the degree of inadequacy is extreme. However, mere pecuniary inadequacy of consideration will not generally render a contract unfair for enforcement. The court will only interfere with a contract if it is convinced that one party has exercised undue influence over the other party.