Consideration

Question 1

Define

Answer 1

Consideration is needed in a contract, otherwise it is just a bare promise.

(Currie v Misa)
Refers to benefit and detriment. What is provided by way of consideration should either be a benefit to the person receiving it, or a detriment to the person giving it. Often both will be present.

Question 2

Sufficiency and adequacy

Answer 2

‘consideration must be sufficient but need not be adequate’

Consideration does not have to adequately reflect the value of the promise in return for which it is given.
(Chapelle v Nestle)

Must be of some nominal value.
(White v Bluett)

Question 3

Past consideration

Answer 3

Past consideration is no consideration. A later promise to pay is unenforceable.

Question 4

Past consideration exceptions

Answer 4

(Lampleigh v Braithwaite)
1. The act was done by the promisors request.
2. The parties must have understood that the act was to be rewarded in some way.
3. The payment, or other benefit, must have been legally enforceable had it been promised in advance.

Question 5

Existing duty owed

Answer 5

Doing something that you are already obliged to do is not sufficient consideration in exchange for a promise of payment.

Question 6

Exceeding an existing duty

Answer 6

Where a party has a public duty to act, this can not be used as consideration.
(Collins v Godefry)

Question 7

Part payments

Answer 7

(Pinnel’s case)
Part payment of a debt is not valid consideration for a promise to forebear the balance unless at the promisor’s request part payment is made:

1. before the due date
2. with a chattel
3. to a different destination