Chapter 3 - Other Requirements Flashcards
What is consideration?
“The price paid for a person’s promise”
In which case did Sir Fredrick Pollock create the idea that consideration is about “the price of a price”?
Dunlop Pneumatic Tyre Co v Selfridge & Co Ltd [1915]
In which case did the use of benefits and detriments come about in relation to consideration, and what is the general definition of consideration in this regard?
Currie v Misa [1875]. The idea is that there is consideration if one party is suffering a detriment and the other is obtaining a benefit.
What is a “bare gift”
An agreement in which there is no consideration given in exchange for a promise. They are generally unenforceable.
What is the exception to the rule that an agreement without consideration is unenforceable?
A promise need not be supported by consideration if it is contained in a deed which has been signed, witnessed and delivered (acted upon) by the person making it.
What is executed consideration?
When a party performs their obligation under a contract at the time of entering into it.
What is executory consideration?
When parties exchange promises to do something in the future. The promise itself is the consideration.
What are the four main rules governing consideration?
It must move from the promisee / it must not be past / it need not be adequate / it must be sufficient
What is the meaning of the rule “consideration must move from the promisee”?
A claimant wishing to sue must prove they have supplied consideration for the promise they wish to enforce. A claimant cannot generally sue if the consideration was supplied by someone else even if the promise was for their benefit (privity of contract) however they will not always be defeated simply on this basis (as in Tweddle v Atkinson [1861].
What is the meaning of the rule “consideration must not be past” and what case law illustrates this point?
Promises in a valid contract are made in exchange for each other and therefore, a party cannot promise to do something which they have already done. Roscorla v Thomas [1842] or Re McArdle [1951]
Explain the main exception to the rule that consideration must not be past?
The doctrine of implied assumpsit, which was established in the case of Lampleigh v Braithwait [1615]. The rule is that if a party performs a service which is normally paid for at the request of the other, then the court will assume that it was meant to be paid for and would enforce a later promise to pay. It occurs for situations such as such as getting a taxi or going to a hairdresser.
The Privy Council in Pao On v Lau Yiu Long [1980] stated that the doctrine of implied assumpsit would apply provided that ..? (three points)
The act was performed at the promisor’s request / It was understood between the parties that a reward would be expected / The later benefit received was otherwise lawful.
What is the corporate case law which applied the doctrine of implied assumpsit?
Re Casey’s Patents [1892]
What is the meaning of the rule that “consideration need not be adequate”, why do the judges use it, and give a case law example?
Consideration does not have to be of equal value to the promise given in exchange, because judges wish parties to make the contract they want rather than the court having to decide a fair contract on their behalf. Used in Chappell & Co v Nestle Co Ltd [1960].
What is the meaning of the rule “consideration must be sufficient”?
As per Thomas v Thomas [1842], sufficient consideration is defined as something with “some value in the eyes of the law”. To be considered something “of value”, it must have economic value and therefore, money (no matter how much) will be considered sufficient consideration
Why was the promise in White v Bluett [1853] by a son to “cease his complaints” about his father’s planned will held not to be valid consideration?
The son had no legal right to make the complaints and so the alleged detriment to him (of stopping the complaints) was not recognised “in the eyes of the law”.
