Chapter 5: Consideration and Causa

Question 1

What is consideration?

Answer 1

consideration is a doctrine under English law, where a promise is legally binding if something has been promised in exchange. ‘price of the promise’. Roots that a contracts is like a bargain, and something has to be given in exchange. element of reciprocity.

Question 2

when is consideration needed? and why?

Answer 2

it is needed ash pre-contractual state, as if it for example only a gratuitous promise, it permits the promisor to change what he is going to offer. Also needed when arranging an existing contract between a party, so that a party can’t benefit from that

Question 3

state the 5 main rules for consideration?

Answer 3

1. Must create a ‘benefit for the promisor’ and ‘detriment to the promisee’
2. Past consideration is not considered good consideration - if something promise after the act - not enforceable
3. Can move from the promisee - if what the promisor asked in exchange benefits a third party and not himself, it is still valid, as it what he has asked for
4. not adequate if it is sufficient - peppercorn theory
5. existing duties are not valid - things that are already requested under law - offer money go and testify in a court
6. existing duties under contract - something that you promise, but is already under the agreements under the contract, is not valid

Question 4

What are the exceptions of consideration?

Answer 4

1.Deed
2. doctrine of estoppel

Question 5

explain how a deed can exempt the need of consideration

Answer 5

the maker signs and their is a will that can be later go to testify. It is normally for gratuitous promises, for example donations. The written document must indicate it is a ‘deed’

Question 6

explain the estoppel doctrine

Answer 6

this stops a party from going against what he did or said. it allows a promise to be enforced without consideration

Question 7

requisites for promissory estoppel to be applied?

Answer 7

1. must be a contractual agreement between parties
2. the maker has to have made a clear and unambiguous announcement not to enforce legal rights
3. Must have created a detriment to the promisee, show that he would have acted differently if there was no promise
4. estoppel can’t create new rights, can only go against existing rights. ‘it is a shield but not a sword’

Question 8

criticism of consideration?

Answer 8

it is sometimes regarded as confusing and unnecessary

Question 9

what is causa?

Answer 9

causa is found in common law systems
it is the final goal that both parties pursue with the contracts

Question 10

difference between objective and subjective causa?

Answer 10

objetive causa: is normally the objective that the both parties share in a bilateral agreement. receiving something in exchange
subjective: the particular motive behind each party and what drives them to create that agreement : e.g selling a car to buy another one. Objective causa would be receiving something in exchange if that car which would be the money, and the subjective causa is the which to buy another car with the money ganado del contrato