Consideration

Question 1

Give notes on consideration and include it’s definition

Answer 1

Consideration must be proven for a promise to be enforceable unless the agreement is made ‘ under seal’

Consideration is the act of forbearance of a party or a promise in return for the original promise.
Anything that thé promisor asks for is consideration

Question 2

Distinguish between consideration and a condition/ motive using a case

Answer 2

Thomas v Thomas
Facts: a husband told his wife that she would get the house if she stays a widow after he dies but it wasn’t in the will. The executor of his will after he dies said that the wife can stay in the house on the basis that she remains unmarried and pays £1 every year.

Held: The wife staying unmarried was merely a condition. The wife didn’t say that she would remain a widow if the husband gave her the house but the husband was the one to say that if she remained unmarried she would get the house so this was a condition rather than consideration.
Consideration must be something of value in the eyes of the law- either to the plaintiffs detriment or the defendants benefit.
The consideration was the paying of the £1 every year

Question 3

What are the principles of consideration

Answer 3

1. Consideration must move from the promisee
2. Consideration must be executory/ executed but not past.
3. Consideration must be sufficient but it doesn’t need to be accurate.

Question 4

Consideration must move from the promisor. Explain and name the cases .

Answer 4

The promise is not enforceable unless the promisee provides consideration. Consideration from a 3rd party is invalid.
1.Tweedle v Atkinson
2. MCcourby v Thomas
Consideration doesn’t need to move from the promisor
- the promisor doesn’t need to gain any benefit from the consideration for it to be valid.
1. Hammer v Sidway

Question 5

Tweedle v Atkinson

Answer 5

Facts: 2 fathers promised to pay their children who were married to eachother money. When the father in law died the son sought money from the promise.
Held: the son was a 3rd party to the contract ( the contract was between the 2 fathers) and therefore he as a promisee couldn’t enforce it because he couldn’t provide consideration.

Question 6

McCourby v Thomas

Answer 6

Facts: a land owner donated land to the defendant and expressed that the defendant must pay a set amount of money to the plaintiff. After the donor died the plaintiff sought for the money.

Held: the plaintiff was a 3rd party leader to the contract and could therefore not provide any consideration and therefore the contract wasn’t enforceable

Question 7

Hammer v Sidway

Answer 7

Facts: uncle offered his nephew money if he stopped drinking, smoking and gambling. Nephew did this.

Held: the contract was enforceable cuz even tho the promisor didn’t gain any benefit the promisee acted to his detriment

Question 8

Consideration must be executory, executed but not past. Explain each term and name the cases.

Answer 8

Executory- where the promisor promises something and the promisee counter promises- they both agree to perform the promises in the future and this is bilateral consideration.

Executive- the promisor makes promise in return for an act by the promisee, the act is considered as the consideration.

Past: if someone does something before the promise is made, and has no relation to a bargain then it is seen as gratuitous and not consideration.

1. Roscorla v Thomas
2. Morgan v Rainsford
3. Provincial BOI v Donell
   4 . R Mcardle

Question 9

Roscorla v Thomas

Answer 9

Facts: the def sold a horse to the pl and after the sale the def said that the horse was free of vice and was of sound mind- that was untrue and the pl sued.

Held: the warranty was made after the sale and therefore the buying of the horse wasn’t subject to that promise and couldn’t be considered as consideration.

Question 10

Morgan v Rainsford

Answer 10

Improvements made to property before a contract was made was past consideration and deemed insufficient.

Question 11

Provincial BOI v O donell

Answer 11

Facts: bank provided a loan to the defendant and after made them sign a guarantee and tried to enforce it.

Held: the promise to fulfill guarantee did not have any consideration because the giving of the loans were prior to it. Couldn’t be enforced

Question 12

R Mcardle

Answer 12

Facts: husband left house to kids upon wife’s death. Wife was living w one other child in the home. Wife made renovations and after children signed a document saying wife will be reimbursed after the property was distributed.
Held: Renovations were past consideration and was insufficient.

Question 13

What are the exceptions to past consideration being invalid

Answer 13

Pao on v lau Long

Lampleigh v braithwaith

Question 14

Pao on v Lau Long

Answer 14

The conditions for the satisfaction of this exception:

1. The act was carried out at the promisor’s request. Connects the action to the promise.
2. There was an understanding that the promisee would be remunerated.
3. The promise to pay, had it been promised in advance, would have been enforceable.

Question 15

Lampleigh v Braithwaith

Answer 15

Facts: D asked P to go to London to obtain a pardon for a crime he had committed. P did so incurring expenses as a result. D promised the plaintiff 100 for his endeavours. When he failed to pay this, the plaintiff sued him successfully for breach of contract.

Held :While the consideration for this promise (obtaining the pardon) was technically past, the court found that the promise was nonetheless enforceable.
As Braithwait had asked Lampleigh to obtain the pardon, and it was implicit that it would be paid for, Braithwait was now bound to fulfil his promise.

Question 16

Consideration must be sufficient but need not be adequate.
Name the cases.

Answer 16

1. White v Bluett
2. O’Neill v Murphy
   3.Brett v JS
3. Chappel co. v Nestle
4. O’Keefe v Ryanair
5. Lipkin v Karnaple
6. Ward v Bynham

Question 17

White v Bluett

Answer 17

Facts: Father promised to pay off his son’s debts if he stopped being annoying, complaining and being boring.

Held: Not complaining was not seen as sufficient consideration in the eyes of the law. Consideration must be something of value.

Question 18

O’Neill v Murphy

Answer 18

Facts: Builder promised to do building if the nuns made prayers for him because he was going through a hard time.

Held: The court did not see prayers as sufficient consideration. It’s clear that it may have been something of value to the defendant but it also must be sufficient in the eyes of the law.

Question 19

Brett v JS

Answer 19

Held: Love and affection towards your mother is not sufficient consideration.

Question 20

Chappel co. v Nestle

Answer 20

Facts: Plaintiff and defendant had an agreement where the plaintiff gave rights to their song in return for royalties of a promotion. The promotion was that people would buy nestle chocolate bars, return 3 wrappers and a certain amount of money and then receive a record from one of the plaintiff’s artists.
The plaintiff was not receiving royalties from the chocolate bars so sued. Nestle said that the chocolate wrappers were not part of the consideration because they had no value for them.

Held: They were part of the consideration because if they were invaluable then they wouldn’t have been part of the promotion and therefore it’s unreasonable to leave the money from the chocolate wrappers out of the royalty payment.

Question 21

O’Keefe v Ryanair

Answer 21

Facts: Plaintiff bought a Ryanair ticket and was told that she was the millionth customer and would get free flights for life. She was asked to participate in a series of promotions. After a year Ryanair denied her the free flights on the basis that they said she did not provide any consideration because her buying the ticket was PAST consideration.

Held: Court said that buying the ticket wasn’t consideration. But Plaintiff gave up her anonymity and privacy to be in those advertisements to benefit Ryanair and therefore that was sufficient consideration.

Question 22

Lipkin v Karnaple

Answer 22

Held: Casino chips did not constitute sufficient consideration as they didn’t have any economic value insofar as they were only props to betting and were the actual property of the casino.

Question 23

Ward v Bynham

Answer 23

Facts: Plaintiff and defendant separated. The defendant was the father of the plaintiff’s child. At the time, it was an unmarried woman’s statutory obligation to look after her child. the defendant promised weekly allowances provided that the plaintiff keep the daughter ‘ well looked after and happy’. After the daughter moved in with the plaintiff the defendant refused the payments and claimed that there was no consideration to make the promise enforceable.

Held: The mother went above and beyond her statutory duty to look after her child by ensuring that she was well looked after and happy, this in turn benefitted the defendant because he was assured that his daughter was happy so, therefore, the promise was binding.

Question 24

Consideration must not be illusionary or invented.
Name the Cases.

Answer 24

1. Moroney v Revenue Commissioners.
2. Aranale v Civil Engineering

Question 25

Moroney v Revenue Comissioners

Answer 25

Facts: Father promised to sell his pub to both his sons for a fixed price. After investigation, it was found that the payment hadn’t actually been made and it was just to stop suspicion.

Held: The consideration was invented and therefore the promise could not be enforced.

Question 26

Aranale v Civil Engineering

Answer 26

Held: It is not sufficient consideration if you are refraining from something you never intended to do- illusionary.

Question 27

Gifts of Onerous Property
Explain in relation to Consideration and mention cases.

Answer 27

A gift of onerous property may constitute good consideration.
This is where a burden comes along with the gift so it’s benefitting and detrimentiing.

Merritt v Merritt- a house with a mortgage
Cheale v Kenway- partly paid shares

Question 28

A compromise or forbearance may constitute consideration.
Name Cases.

Answer 28

1. Hammer v Sidway
2. Mcgillicudy v Joy

Question 29

Hammer v Sidway

Answer 29

Facts: Uncle promised to pay nephew 1000 if he quit smoking, alcohol and gambling during college and nephew agreed.

Held: The nephew stopped doing what he had every right to do to stick to the uncle’s promise, if he had been left to his own vices he would’ve done all of that but he was acting to his detriment to fulfilling the requirements of the promise. The promisor doesn’t need to gain any benefit from the consideration for the promise to be enforceable.

Question 30

Mcgiluudly v Joy

Answer 30

Held: refraining from putting in a bid at an auction constituted to good consideration as the buyer benefitted from it.

Question 31

Explain Forbearance to Sue and Consideration.
Name Cases

Answer 31

A forbearance to sue is normally not seen as consideration unless it is induced by the promise.
1. Combe v Combe
2. Alliance Bank v Broom
3. Callinger v Bischofhein

Question 32

Combe v Combe

Answer 32

Facts: Plaintiff and defendant who were married separated. The husband promised to pay a weekly maintenance fee. When the husband went through a financial hardship the plaintiff made a decision to not press for the money. After he had surpassed his hardship she sued for the backpay claiming that her forbearance to sue was good consideration.

Held: No one asked her to not sue for the money and therefore it wasn’t good consideration. The husband didn’t make a request for her to not claim the payment, it was out of her own free will.

Question 33

Alliance Bank v Broom

Answer 33

Facts: Def owed money to the bank and as a result, they asked for security when trying to enforce that security the def argued that there was no consideration.

Held: Although they did not explicitly state their forbearance to sue, the taking of security implied it and therefore it was good consideration.

Question 34

Callinger v Bischoffshien

Answer 34

Held: When a person believes in good faith that they are giving up something to benefit the other party, then that is good consideration.

Question 35

A forbearance to sue is only good consideration if it is induced by the promise.
Name the 2 cases for comparison.

Answer 35

1. Commodity Broking v Meehan
2. McDonell v Ring

Question 36

Commodity Broking v Meehan

Answer 36

Facts: Def took on the debts of its company that was going insolvent and agreed to pay in monthly instalments. Once the payments stopped the plaintiff sued and argued that their forbearance to sue the original company was good consideration for the payments of the debts.

Held: There was no expressed or implied forbearance and even if they had sued the company, it would be pointless because they were insolvent,

Question 37

McDonnell v Ring

Answer 37

Facts: Def took a personal guarantee to pay off the debts of a company that was going through financial hardship. The personal guarantee induced the bank to forebear to sue.