Consideration Flashcards
Two Types of consideration
Executed consideration = an act in return for a promise.
Executory consideration = a promise in return for a promise.
Explain the rule that Consideration need not be adequate but must be sufficient
The parties can contract on any terms they choose (freedom of contract) so the courts are not interested in whether each party has a good ‘deal’ i.e. if the consideration is adequate.
However, the consideration must be sufficient. Sufficiency means that the consideration must be real, and have some value (White v Bluett).
Explain the rule of Past consideration is no consideration
A past action cannot amount to new consideration for a contract
Re McArdle applies to what consideration rule?
Past consideration is no consideration
Exception Past Consideration is no consideration
The exception to this rule was set out in Lampleigh v Braithwait, where the court held that in certain scenarios it will be implied that payment will be due even if it was never initially discussed .
Explain the rule that Consideration must move from the promisee
Consideration must move from the parties to the contract
Tweddle v Atkinson applies to which consideratio rule?
Consideration must move from the promisee
Performing a pre-existing duty cannot be new consideration
If X has a duty to do something then fulfilling that pre-existing duty cannot be consideration
Stilk v Myrick applies to which consideration rule?
Performing a pre-existing duty cannot be new consideration
Exception to performing a pre-existing duty
If X does more than could be expected from the duty (ie X goes above and beyond the duty) then that can be consideration
Hartley v Ponsonby applies to which consideration exception?
If X does more than could be expected from the duty (ie X goes above and beyond the duty) then that can be consideration
Explain the rule Part payment of a debt in regards to consideration
The part payment of a debt cannot be classed as consideration for a new agreement.
D&C Builders v Rees applies to what consideration rule?
The part payment of a debt cannot be classed as consideration for a new agreement.
Exception to part payment of a debt
An exception to this is accord and satisfaction – if the receiving party agrees to receive something other than money from the debtor then this may amount to consideration. This could be:
Creditor accepting part payment but earlier than whole payment due
Creditor accepting something other than money in settlement of the debt
Explain the rule of Social and domestic agreements when discussing intention to create legal relations.
In social and domestic arrangements (eg paying pocket money), it is assumed by the court that there is no intention to be legally bound by the agreement. However, if there is evidence that the parties did intend to be legally bound then the courts will find as such.
