Humber/Ontario Real Estate Course 1 Exam Practice

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Which of the following is NOT deemed to be adequate consideration for purposes of an enforceable contract?

Each party to the contract provides some form of consideration to the other.
The consideration must be lawful.
A small amount of money that renders the contract extremely one-sided and detrimental to one of the parties.
A promise to pay in return for a promise to sell.

The correct answer is: A small amount of money that renders the contract extremely one-sided and detrimental to one of the parties.

In this scenario, options A, B, and D are all examples of adequate consideration for purposes of an enforceable contract. Option A states that each party to the contract provides something in return, which is a fundamental principle of contract law known as the concept of "bargained-for exchange." Option B mentions that the consideration must be lawful, which is also a crucial requirement for a contract to be enforceable. Option D describes a promise to pay in exchange for a promise to sell, which represents a valid consideration as it involves mutual promises. On the other hand, option C suggests that a small amount of money that makes the contract extremely one-sided and detrimental to one of the parties can be considered inadequate consideration. For a contract to be valid, the consideration provided by each party should have some degree of fairness and not be grossly unfair or heavily weighted in favor of one party at the expense of the other.