Chapter 4: Consideration

Question 1

Types of consideration

Answer 1

Present - ok

Future - ok

Past - Not valid consideration

Question 2

Sufficiency and adequacy of consideration

Answer 2

Consideration need not be adequate but must be sufficient

Sufficient if it has some value, does not have to form part of a fair deal

Performance of existing contractual obligations is not generally sufficient consideration for further reward

If both parties derive a practical benefit then a promise for additional consideration may be enforceable, even if legally one party receives no more than he was originally entitled too.

Question 3

Partial Performance (Part Payment, Rule in Pannel’s case

Answer 3

Part payment of debt is insufficient consideration and the creditor will be able to sue for the outstanding balance

Question 4

Exceptions to the rule in Pinnel’s case , provided accepted by the the creditor

Answer 4

Alternative consideration
Early Payment
Payment by third party
Alternative location
(all common law)

Equitable doctrine of promissory estoppel
(Equity)

Question 5

Equitable doctrine of promissory estoppel

Answer 5

Promise to stop claiming a balance in full

Creditor makes a gratuitous promise to his debtor that he will not insist on full payment of a debt and the promise is made with the intention that the debtor will rely on it and the debtor does so, the the creditor is estopped (prevented) from denying the genuineness of his promise.