Brief Fact Summary.
Plaintiff, Batsakis, loaned Defendant, Demotsis, 500,000 drachmae. In exchange for the loan, Defendant signed an instrument promising to pay Plaintiff $2,000 in U.S. currency. The 500,000 drachmae were worth approximately $25.00 at the time.
Synopsis of Rule of Law.
Inadequacy of consideration alone will not void a contract.
A plea of want of consideration amounts to a contention that the note never became a valid obligation in the first instance.View Full Point of Law
Due to conditions created by World War II, Defendant could not access money and property owned in the United States. Knowing that Defendant was in financial distress, Plaintiff agreed to lend Defendant 500,000 drachmae, worth at the time approximately $25.00 in U.S. currency. In exchange of the money loaned by Plaintiff, Defendant executed a written instrument promising to pay Plaintiff $2,000 in U.S. currency.
Was the consideration inadequate?
No. The consideration was not inadequate.
Defendant argued that given the great difference in value between what was given and what was received, the consideration for the agreement was inadequate and the contract should be voided. The Court disagreed stating inadequacy of consideration alone is not sufficient to void a contract. The Court further noted that Defendant received exactly what was contracted for.
In this case, the Court expressed a reluctance to weigh the adequacy of consideration. Without evidence of fraud, duress, or misrepresentation, the Court is unwilling to void the contract merely because there may be insufficient consideration.