Class 6 - Consideration Flashcards
Is a promise to make a gift enforceable?
NO
An oral promise to make a gift is not enforceable
Are a manifestation of mutual assent to the exchange and a consideration elements that are required to the formation of a contract?
YES
We need these 2 elements
We need an offer and acceptance (manifestation of mutual assent which is the exchange of promises) AND consideration.
What to remember from White (Executor) v. William Bluett?
Facts : Father loaned money to son. When it came time to repay, son complained that father treated him worse than other brothers. Father finally agreed that if son would stop complaining, that he would give up and cancel the promissory note. Promissory note means they are bound on the promise, no matter who owns the paper. To cancel the debt, the father would have to take back the paper and write cancel on it. After the father died, the executors sue the son for the note. The son argues that this agreement was I promise.
Held : No consideration. The promise was not enforceable. Why? Because the son had no legal right to complain. Abstaining from something you had no right to do is not a consideration. He had a right to complain, but he had no legal right. Giving up your right to complain to your father is giving up nothing at all.
What to remember from Hamer v. Sidway?
Facts : Uncle promises the 16 years old nephew that “If you will give up drinking, swearing, tobacco, and playing cards, I will give you $5,000”. The boy does. The uncle said you’re right, you’re entitled to the money, but I’ll hold on to it and invest it. The uncle dies. The boy comes to the executor. The executors say that there is no consideration here because the kid gave up something that he was better of for it. What he had done has actually bettered its condition. Plus, the uncle doesn’t get anything out of it.
Held : Yes, the boy is entitle to this money.
Consideration is giving something up or giving up a legal right. It doesn’t matter, if the uncle got something, as long as the nephew gave up something it’s enough.
What is the difference between White (Executor) v William Bluett and Hamer v Sidway?
In the decision Hamer v Sidway, the court said that there was consideration because the boy gave up something that he has a legal right on.
In White (Executor) v William Bluett, the son had a right to complain, but he had no legal right.
What to remember from the case Thomas v. Thomas?
Facts : Woman’s husband dies. Before he dies, he tells his executors that he wants the wife
to continue to live in the house after he dies. He has expressed the wish, to which one
of the executors has agreed.They sign a document essentially leasing the property to her in exchange for a payment of 1$ per year and the duty to take care of the house.
Held : because a gift is not enforceable, you may sell a piece of land or X by paying 1$.
By agreeing to pay rent in return for being allowed to stay in the property, Mrs Thomas had provided consideration
What to remember from the case Great Northern Railway v Witham?
Facts : Agreement to order steel for a certain price if it is ordered. GNR do end up buying the steel. Then, the price goes up, and GNR puts in an order at the original price. Witham refuses to deliver the steel and he says the contract no longer exists. The buyer says the contract stated “in such quantities as the company’s store-keeper might order from time to time. The seller says there is no contract because there is no consideration. He claims the buyer promised nothing, that there was no promise to buy the steel.
Held : Court says there is no contract beyond what has been discussed between the parties. There is a lack of mutuality.
Can we have a contract when there is no mutuality of obligation?
NO, this is what we call an illusory promise
See Tobias v Dick & T Eaton
What is the rule in Wood v Lucy, Lady Duff Gordon?
Facts : Lucy was a branding lady putting her name on stuff. She enters into a contract. He goes get her contract, puts her name on thing, and she gets part of the money. She wants to cut him off so she doesn’t have to go through him. He says, cutting him out of the money is a breach a contract.
She says that there is nothing in the contract that force her.
Held : Mutuality or a return promise may be implied from the circumstances surrounding the contract and the nature of the whole writing.
What is the difference between a waiver and a modification of the promise?
A waiver is a relinquishment of a know right.
Modification of promise is when we have new terms, new consideration.
What to remember from Stylk v. Myrick?
Facts : Facts ; guys on a ship, they are on a voyage. 2 of there number are lost (illness, etc.). They were 14, now 12. So more works for them to do. They want to be compensated for that. They say we will not go further unless you give us the extra money. The master of the ship promises to give them the extra money. Once they get to the port, at the moment when he pay them, he refuses to give the extra money they were promised. They say that they amended the ancient contract.
Held : The court said the master can say no because he has not received anything more that was originally promised to him.
When you sign one, you know that not everybody that start the voyage gets back (it’s the risk, and it’s a risk they have taken by signing the deal). All of that is contemplated in the agreement
Can you claim more money if it is a risk that you anticipated or ought to have anticipated?
NO, it’s a factual question
If it shouldn’t be anticipated, then giving more money should be enforceable.
Can you claim more money if it is a risk that you anticipated or ought to have anticipated?
NO, it’s a factual question
If it shouldn’t be anticipated, then giving more money should be enforceable.
What to remember from Gilbert Steel?
Facts : Supplier entered into a written contract with the Builder for the supply of steel at a fixed price for 3 building projects. Later price of steel increases. Supplier ask Builder to agree to a price increase. They make an oral agreement by which Builder agrees to pay. Builder continued to accept deliveries of new steel, but when the project was done, the Builder refused to pay the higher price.
Held : the court said there is no consideratio. He was in the business of supplying stell, he should have anticipated the increase of the price.
“Your failure to anticipate or judge the market properly is your problem.”
What to remember from the case NAV Canada?
Facts : Nav Canada and Greater Fredericton Airport Authority were parties to an Aviation Services facilities Agreement which included terms governing responsibilities for certain expenditures. GFAA said Nav should pay the acquisition costs for the new equipment. Nav would only agree to purchase the new equipment if GFAA agreed to pay for it. GFAA agreed to pay but only “under protest”. They thought it was already in the contract. Nav completed the work and incurred the expense. GFAA refused to pay.
Held : the variation was not a consideration.
The Court accepted that a post-contractual modification, unsupported by consideration, may be enforceable as long as it is established that the variation was not procured by economic duress.
