A promise is made by the parties to do something in return for something. This ‘return of something’ is known as consideration. The doctrine of consideration is one of the most important tests of whether a promise is worthy of being enforced by law. Both parties to a contract must gain some benefit from the contract and must suffer a detriment. The consideration does not need to be adequate. The law does not compensate for a bad bargain. However, the absence of consideration makes a contract void.There must also be an intention to create legal obligations. An agreement becomes a contract only when it becomes enforceable by law. Social agreements and agreements made in jest are not made with an intention to create legal relations. Domestic arrangements between husbands and their wives are not considered as contracts because of the lack of intent to create legal relations. However, when a couple separates and an agreement is made according to which the husband agrees to pay his wife monthly, the agreement becomes enforceable by law because legal relations are created. Other essentials of the contract include the capacity of parties (none of them should be a minor or of unsound mind) and legality of purpose (the subject matter of the contract should be legal).A simple contract consists of an offer, acceptance, consideration and legal relations. It may not even be in writing unless it involves a transfer of land. Aspects of Contract and Negligence for Business.
Bettini v Gye  QBD 183
Hong Kong Fir Shipping v Kawasaki Kisen Kaisha  2 QB 26
Poussard v Spiers  1 QBD 410
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