This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
If no consideration for the promise exists there is no contract and specific performance is of course refused.1 An agreement to accept shares of stock on which nothing has ever been paid, and relieve the transferrer from all liability thereon is such consideration as to justify specific performance.2 However, specific performance will be granted where under an oral promise to make a gift of realty possession has been surrendered to the donee and valuable improvements have been made by him.3 Inadequacy of consideration in contracts to pay money in consideration for money is a ground for refusing relief in equity as well as in law. Thus equity will not enforce a note and mortgage for" three thousand dollars, given to take up a note of two thousand dollars.4 Equity, in cases where specific performance is sought will go further than law, however, in requiring the consideration to be adequate. If the consideration is so inadequate that the contract is unconscionable specific performance will be refused, even though the contract may be enforceable at law, and the remedy of rescission may be denied to the defendant.5 The party seeking relief will be left to his remedy at law.6 While extreme inadequacy of consideration may be the occasion for refusing specific per-formance, the question must be decided by the facts as they exist when the contract is made, and not by the subsequent developments.7 Thus a contract to develop a mine, fair and reasonable when made, is not rendered unconscionable by the discovery at a subsequent time of a rich vein of ore.8 In contracts where consideration would be presumed at law, the same presumption will arise in equity where specific performance is sought, as in case of written contracts by the statutes of some states,9 or contracts under seal.10 Even in jurisdictions where a sealed contract was enforceable at law by reason of its form, irrespective of consideration, equity would not grant specific performance unless a valuable consideration existed.11 Lack of consideration is also involved in the subject of mutuality.12
12 Ensminger v. Peterson, 53 W. Va. 324; 44 S. E. 218.
13 Cobban v. Hecklen, 27 Mont. 245; 70 Pac. 805.
14 Rank v. Garvey, - Neb. -; 92 N. W. 1025.
15 Pennsylvania Mining Co. v. Thomas, 204 Pa. St. 325: 54 Atl. 101.
1 Winter v. Geobner, 21 Colo. 270; 40 Pac. 570; Geer v. Goudy, 174 111. 514; 51 N. E. 623; Preston v. Williams, 81 111. 176 (obiter) ; Bright v. Bright, 8 B. Mon. (Ky.) 194; Selby v. Ease, 87 Md. 459; 39 Atl. 1041; Shinkle v. Viekery, 156 Mo. 1; 55 S. W. 456; McCampbell v. Farnsworth, 3 Coldw. (Term.) 317; Pennybacker v. Maupin, 96 Va. 461; 31 S. E. 607; Hibbert v. Mackinnon, 79 Wis. 673; 49 N. W. 21.
2 Cheale v. Kenward, 3 De G. & J. 27.
3 Cauble v. Worsham. 96 Tex. 86; 97 Am. St. Rep. 871; 70 S. W. 737-See Sec. 725.
4 Richardson v. Barrick, 16 la. 407.
5 Prince v. Lamb, 128 Cal. 120; 60 Pac. 689; Condon v. Osgood, 97 la. 1; 65 N. W. 1003 (contract made by unauthorized agent, for inadequate consideration) ; Lee v. Kirby, 104 Mass. 420; Butler v. Duncan, 47 Mich. 94; 41 Am. .Bep. 711; 10 N. W. 123; Ferguson v. Blackwell, 8 Okl. 489; 58 Pac. 647; Conaway v. Sweeney, 24 W. Va. 643; Mulligan v. Albertz, 103 Wis. 140; 78 N. W. 1093.
6 Mathews v. Davis, 102 Cal. 202; 36 Pac. 358; Kelly v. Central P. R.
Co., 74 Cal. 557; 5 Am. St. Rep. 470; 16 Pac. 386; Sturgis v. Galindo, 59 Cal. 28; 43 Am. Rep. 239; Bruck v. Tucker, 42 Cal. 346.
7 Morrill v. Everson, 77 Cal. 114; 19 Pac. 190; Finlen v. Heinze, 28 Mont. 548; 73 Pac. 123; Peterson v. Chase, 115 Wis. 239; 91 N. W. 687.
8 Finlen v. Heinze, 28 Mont. 548; 73 Pac. 123.
9 Cone v. Cone, 118 la. 458; 92 N. W. 665.
10 Guyer v. Warren, 175 111. 328; 51 N. E. 580; Lyle v. Addicks, 62 N. J. Eq. 123; 49 Atl. 1121.