Consideration

Question 1

Definition of consideration

Answer 1

“An act of forbearance of one party, or the promise thereof, is the price for which the promise of the other is bought, and the promise thus given for value is enforceable” Dunlop v Selfridge Ltd

Question 2

Rules of consideration

Answer 2

Need not be adequate but must be sufficient
Past consideration is not good consideration
Consideration must move from the promise
Performing an existing duty cannot be the consideration for a new contract
A promise to accept part-payment of a pre-existing debt in place of the whole debt is not consideration

Question 3

Adequate but not sufficient

Answer 3

Adequacy - law is concerned with bargains not gifts
Thomas v Thomas - £1 rent was consideration
Chappell v Nestle - chocolate bar wrappers were consideration
Sufficiency - must have some value
White v Bluett - not complaining isn’t consideration as he has no right to
Ward v Byham - keeping child happy was consideration as she had no legal obligation

Question 4

Past consideration is no consideration

Answer 4

Re McArdle - promise to make payment had come after work, so no consideration
Re Casey’s Patient - it was implied that the work would be paid
Lampleigh v Braithwait - actions so important that a fee must have been implied

All must apply for exceptions
1. An express or implied request by the promisor to the promisee to perform a task
2. An implied promise inherent in the request that the promisor will pay the promisee a reasonable sum for performing the task
3. The performance of the task, and
4. The payment of money by the promisor to the promisee for that performance

Question 5

Consideration must move from the promisee

Answer 5

Must come from a party within the contract (privity issue)
Tweddle v Atkinson - had given no consideration and was not a party himself

Question 6

Pre-existing duty cannot be consideration for a new contract - cases where claim didn’t succeed

Answer 6

Applies to public duty (police)
- Collins v Godefroy, existing duty as police officer to be in court
prior contract (employment)
- Stilk v Myrick, employees agreed to do everything possible in case of emergency
payment of existing debt

Question 7

Exceptions for pre-existing duty

Answer 7

Glasbrook Bros v Glamorgan County Council - police provided more men and in a different way
Hartley v Ponsonby - reduction in numbers made voyage more dangerous so there was an extra element
Williams v Roffey - defendant offered extra money and was gaining by not having to pay client

Question 8

Part payment of existing debt not consideration

Answer 8

Established in Pinnel, confirmed in Foakes v Beer
Two exceptions
1. Creditor can accept something other than money and that is good consideration (e.g. belongings)
2. Promissory estoppel - if one party agrees to vary the contract and the other party relies on that promise, the promisor cannot go back on the agreement