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Review Your SQE 1 Practice Records

Examination Timing: 00H00M03S

In a promotional campaign, Sweet Treats Ltd. offered a music CD titled "Melancholy Tunes" in exchange for three chocolate bar wrappers and a payment of £0.80 for postage. Melody Records, the publisher of the CD, claims it is entitled to 7.25% of the selling price of each CD and is now suing Sweet Treats Ltd. Sweet Treats Ltd. argues that the chocolate bar wrappers have no direct value and thus cannot be considered part of the consideration.


Were the chocolate bar wrappers part of the consideration in the contract for the CD?

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The chocolate bar wrappers were indeed part of the consideration in the contract to obtain the CD, "Melancholy Tunes". In contract law, consideration is something of value that is exchanged between parties, and it doesn't necessarily have to have intrinsic value. The leading case, Chappell & Co Ltd v Nestlé Co Ltd (1960), established that wrappers can form part of the consideration because they represent part of the deal offered by the company, even if the company ultimately throws them away. This case confirmed that consideration must have some value in the eyes of the law, which was fulfilled by the wrappers representing the purchase of the chocolate bars and fulfilling the terms of the promotion. 


Key Point: Consideration is a fundamental element and is defined as something of value exchanged between the contracting parties. It need not be of significant economic value but must be sufficient and move from the promisee. The wrappers, although discarded, formed part of the promotional consideration, illustrating that consideration can include items or actions specified in the agreement, irrespective of their intrinsic economic value. This principle helps ensure that all parts of a promotional offer are legally binding and enforceable.

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