Which of the following statements in relation to effective consideration is correct?

Effective consideration in contract law refers to the value that parties exchange to form a binding agreement. The key aspect of consideration is that it must be sufficient to support a contract but does not need to be adequate. This means that as long as the consideration has some value in the eyes of the law, it will be deemed sufficient to support a contractual agreement.

For instance, consider a situation where one person agrees to sell a car for $1. Although this amount is not adequate in a market sense (since the car is worth much more), it is still considered sufficient to create a binding contract. The law does not assess whether the consideration is equivalent or proportionate to the value received, as long as there is a measurable exchange of value.

This understanding clarifies that consideration does not need to match the perceived value or adequacy; it merely needs to fulfill the sufficiency requirement, thus supporting the chosen answer effectively.