Consideration Flashcards
What happened in the Currie v Mist (1875) case?
It was held that a valuable consideration, in the sense of the law, may consist either in some right, interest, profit or benefit accruing to the one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other.
What is consideration?
The exchange of the something of value
What is Executory Consideration?
This occurs where a contract is formed through an exchange of promises. It is a promise to perform an action at some future time
What is Executed Consideration?
This occurs where a contractual obligation to pay arises when one party has performed their consideration. The offeror promises something in return for the offeree doing something, the promise only becomes enforceable when the offeree has actually performed the act.
What happened in the Re McArdle (1951) case and what it is an example of?
Example of consideration must not be past
Mr McArdle died and left his house to his wife and after her death to their four children. While Mrs McArdle was alive, one son and his wife moved into the house. The daughter-in-law made a number of home improvements costing £488.
After she had completed the improvement, all the children had signed an agreement stating that the daughter-in-law would be reimbursed when Mrs McArdle died.
However, on her death the children refused to reimburse the daugther-in-law.
It was held that as the work was completed before the agreement, the work was past consideration and the agreement was legally unenforceable.
What are the rules of consideration?
Consideration must not be past
Consideration must move from the promisee
Consideration must be sufficient but need not be adequate
What does Consideration must not be past mean?
Any act must not come before a promise
What two situations can occur for the Consideration must not be past rule not to apply?
1) The act was completed in response to a specific request
2) The situation was one where payment would normally be expected
What happened in the Re Stewart vs Casey (1982) case and what is it an example of?
An example of the situation was one where payment would normally be expected
An employer asked an employee to work on an invention. After the work was completed the employee was promised a share of profits. It was held he was entitled to his share as he had undertaken the work at the request of his employer and as it was an employee/employer relationship there was an implication that payment would be made.
What does Consideration must move from the promisee mean?
In order for a promise to enforceable, a person must have provided consideration. This means that a party who is not part of the contract cannot enforce any rights. Only those who have contributed consideration can sue on the contract.
What does Consideration must be sufficient but need not be adequate mean?
This means that any consideration must be of material value in the eyes of the law.
What happened in the White v Bluett (1853) case and what is it an example of?
An example of Consideration must be sufficient but need not be adequate
A father cut a son out of his will. The father agreed to release the son from a debt in return for ceasing to ask about writing a new will. After the death of the father the son was asked for the debt who refused to pay stating the agreement with the father. As the son had not provided any consideration the promise was not valid. He had not given anything by refusing to ask about a new will.
What happened in the Thomas v Thomas case and what is it an example of?
An example of Consideration must be sufficient but need not be adequate
An owner of a house promised that the widow of the previous owner could occupy the house for life in return for £1 and keeping the house in good repair. Later the owner tries to recover the house from the widow. The promise to pay £1 and keep the house in good repair was sufficient consideration.
What happened in the Collins v Godfrey case (1831) and what is it an example of?
An example of Consideration must be sufficient but need not be adequate
The claimant was a witness at a trial and was under a legal duty to attend and given evidence. As an incentive the defendant promised to pay the claimant some money if he attended. It was held that the promise to pay was not legally binding. The claimant was already under legal duty to attend court and he had not provided any new, fresh consideration.
What happened in the Stilk v Myrick case (1809) and what is it an example of?
An example of Consideration must be sufficient but need not be adequate
When a ship was at a foreign port two seamen deserted. The captain promised the rest of the crew that the wages of the two deserters would be shared between them if they sailed the ship back to London. The crew complied, but on reaching London the ship owners refused to share out the wages of the two. It was held that in completing the voyage the crew were performing their existing contractual duties and had given no addition consideration in return for the promise to pay a share of the deserters wages.
