Consideration

Question 1

What is executed consideration?

Answer 1

An act in return for a promise

Question 2

What is executory consideration?

Answer 2

A promise for a promise

Question 3

What are the 5 rules of consideration?

Answer 3

1. Need not be adequate but must be sufficient
2. Past consideration is not good consideration
3. Consideration must move from the promise
4. Performing an existing duty cannot be the consideration for a new contract
5. A promise to accept a part payment of a pre-existing debt in place of the whole debt is not consideration

Question 4

Define need not be adequate & it’s cases (2)

Answer 4

Parties agree that the value of the exchange is equal - does not need to be ‘market value’ or equivalent value
Both cases are of good consideration:
1. Thomas - £1yr rent
2. Nestle - chocolate wrappers

Question 5

Define sufficient and it’s cases (2)

Answer 5

Must be real & have some value even if nominal

1. White: didn’t have legal right to complain - no value
2. Ward: consideration - as not obligated to keep child happy

Question 6

What’s past consideration?

Answer 6

Consideration has no value where it had already been done when the agreement was made

• Re McArdle: previous work doesn’t count

Question 7

What is the exception to past consideration?

Answer 7

Promises express or implied request for task with implied understanding the task should be paid for - Must be

1. Promise of reasonable sun
2. Request by promisor to promisee
3. Performance of task
4. Payment of that task

= typical business contract: ReCaseys patent