Consideration

Question 1

1. Consideration must be given by each party to…

Answer 1

Consideration must be given by each party to make a contract binding. A number of rules and exceptions have developed. The main rule is that consideration must move from the promisee (Tweddle v Atkinson).

Question 2

2. Consideration need not be equal or adaquate…

Answer 2

If Relevant: Consideration need not be adequate nor equal on each side (Thomas v Thomas), but must be sufficient. It must have real value (Chappell v Nestle) and includes giving something up (Hamer v Sidway).

Question 3

3. IF RELEVANT: Past Consideration is not good consideration. This is where a party promises to…

Answer 3

IF RELEVANT: Past Consideration is not good consideration. This is where a party promises to pay for something that has already been done (Roscorla v Thomas). Good consideration must be a promise for the future, not the past (Re McArdle).

Question 4

4. Exceptions are that past consideration will be good consideration where…

Answer 4

Exceptions are that past consideration will be good consideration where a reward was always expected because it was in a commercial situation (Stewart v Casey), OR where the act was requested by the other party (Lampleigh v Braithwaite).

Question 5

5. IF RELEVANT: Performance of an existing duty cannot be…

Answer 5

IF RELEVANT: Performance of an existing duty cannot be Consideration for a new contract (Stilk v Myrick).

Question 6

6. Exceptions are where an existing duty has become more….
   And if promising to pay more for an existing duty gives….

Answer 6

Exceptions are where an existing duty has become more difficult or different (Hartley v Ponsonby), and if promising to pay more for an existing duty gives a ‘benefit’ or avoids a ‘detriment’ to the promisor (Williams v Roffey Bros).

Question 7

7. Performing an existing PUBLIC duty, such as…

Answer 7

Performing an existing PUBLIC duty, such as a policeman giving evidence at court (Collins v Godefroy), is not good consideration unless it goes beyond what is normally required.

However, exceeding a public duty does amount to good consideration for a promise of payment (Glasbrook v Glamorgan, Ward v Byham).

Question 8

8. If Relevant: Performing a duty owed to a third party…

Answer 8

If Relevant: Performing a duty owed to a third party is good consideration (Shadwell v Shadwell).

Question 9

9. Part payment of a debt in place of a whole debt is not…

The Lender can claim…

Answer 9

If Relevant: Part payment of a debt in place of a whole debt is not good consideration (Pinnel’s Case), so the balance of the debt remains outstanding.

The lender can claim the remainder of the debt, even if they had previously agreed that part payment would clear the debt.