3 Consideration, Estoppel and Intention Flashcards
What is Consideration?
In order to acquire the right to enforce another’s undertaking, a party must undertake to give or actually give something stipulated by the other as the price for his undertaking.
Basically, giving money in return for a product.
Who must consideration be requested by?
Consideration must be requested by the promisor.
It must move from the promisee for the contract to be enforceable.
What is the law on past consideration?
Past consideration is not good consideration.
Consideration must be given in response to the specific promise so cannot pre-date it - Eastwood v Kenyon [1840].
What is the law on valuable consideration?
Currie v Misa [1875] - ‘a valuable consideration, in the sense of the law, may consist either in some right, interest, profit, or benefit accruing to the one party, or some forbearance, detriment, loss, or responsibility given, suffered, or undertaken by the other’.
Benefit and detriment are staples of consideration. Performance with economic value is valuable consideration.
What are two criticisms of consideration?
Atiyah argues that consideration is given too wide a meaning to enforce promises the courts want to and not enforce ones that seemed undesirable.
Treitel suggests that courts are ‘inventing’ consideration.
What is the law on trivial and nominal consideration?
Consideration need not be adequate. Even a trifling benefit or detriment can constitute valid consideration i.e. 3 chocolate bar wrappers in Chappell v Nestle [1960].
If consideration is incontrovertibly less than the promise then the promise is unenforceable i.e. £1 for £1,000.
What is the law on Intangible Benefits?
Intangible benefits i.e. ‘love and affection’ are not valuable consideration.
They are impossible to enforce as there is no standardised measure.
What is the law on Pre-existing duties?
A promise to perform an existing duty is no consideration as there is no value in the eye of the law.
Is offering the same for more good consideration?
No, following Stilk v Myrick [1809].
Contrary to Stilk v Myrick is Hartley v Ponsonby [1857] where over half of the crew had mutinied, asking a lot of extra of the rest of the crew.
In what case will the intention to create legal relations not be found? Why is this important?
Intention to create legal relations will not be found in social and domestic agreements - i.e. husband and wife - Balfour v Balfour [1919].
This is said to keep contract in its place by Hedley, as finding intention in commercial agreements and not social ones limits indeterminate liability, promotes market transactions and upholds freedom from contract.
What is the significance of Williams v Roffey Bros [1991]?
It found that practical benefit is valid consideration.
In the case 1) W’s continued performance 2) avoiding the trouble and expense of obtaining a substitute 3) avoiding the penalty payment for late performance under the main contract
Williams is in tension with Stilk v Myrick as it did not overrule it but significantly undermined it.
Is part payment of a debt good consideration?
No, following Foakes v Beer [1884].
In Re Selectmove [1995] the court chose not to extend the Williams v Roffey Bros [1991] principle to less for the same cases.
What issues about consideration did Lord Goff raise in White v Jones [1995]?
It is inconsistent with the intentions of the parties.
It is over-inclusive in enforcing some non-bargains as bargains.
It is under-inclusive in failing to enforce some undertakings that deserve enforcement.
It is overly technical, artificial and internally incoherent.
What are some of the alternatives to consideration?
Replacing consideration with a general test of intention.
Using consideration to include ‘any good reason for enforcement’ - Atiyah.
Retain bargaining consideration whilst recognising other good reasons for enforcement or non-enforcement - Treitel.
What are Formalities?
Formalities which limit freedom of contract in important or inherently one-sided contracts.
