Consideration Flashcards
Which cases say that consideration must be sufficient but not adequate?
Chappell v Nestle Co. The court decided that the chocolate bar wrappers did have economic value even though the economic value of goods exchanged were not equal. Therefore there was consideration.
Thomas v Thomas. £1 rent was of economic value even though it wasn’t adequate. Therefore there was consideration.
Why doesn’t the court care if the things exchanged are of equal value?
The UK believes in freedom of contract. Parties are free to accept of decline agreements so parties making bad bargains have only themselves to blame. It is also impossible to tell what anything is worth at a particular moment so trying to balance values would be very challenging. However, this doesn’t protect anyone with weaker bargaining power.
Which case said that giving up something of value (even if it is not given to the other party) can be consideration?
Jones v Padvatton
What did White v Bluett say?
Love and affection has no economic value. The son also had no right to complain so giving this up was not consideration either.
Which case says that love and affection can be consideration?
Ward v Byham although this was likely an isolated decision that will not be followed in future.
What is the case and legal principle for an existing legal or public duty?
Collins v Godefroy- where a person is only doing something they have to do under the law, this is not good consideration in return for a promise. The police officer had a legal obligation to appear in court anyway so was giving nothing extra in return for the money.
Which case says that going beyond a legal duty can be consideration?
Glasbrook Bros v Glamorgan CC
What did Stilk v Myrick say?
Where there is an existing contractual duty, a person who fulfils this does not have good consideration. Stilk was only doing what he had agreed to do (just slightly more of it) so there was no good consideration.
Which case distinguished Stilk v Myrick and said that going beyond a contractual duty can be good consideration?
Hartley v Ponsonby. There was drastically more work here and the trip was even more dangerous than before so the extra work was good consideration.
What was the legal principle of Williams v Roffey Bros?
If there is an extra practical benefit, this can be consideration. Here, Roffey avoided the penalty fee and was saved the trouble of finding someone else to finish the work instead. Therefore, the practical benefit amounted to good consideration.
What is the problem with the decision from Williams and Roffey Bros?
It respected freedom of contract but to do this, the court had to come up with an artificial argument about an extra benefit that Roffey would have got anyway from the original agreement to stop the contract failing. This suggests that consideration is not very useful in practice and the courts have to find it artificially to enable contracts to exist.
Which case sets out the exception of third party contracts?
Scotson v Pegg. The court decided that the agreement Scotson had with X was also good consideration for a 2nd agreement with Pegg. (This rule only applies to contractual not legal duties).
Which case says that consideration must not be given in the past?
Re McArdle. The renovations were done before any agreement for Mrs McArdle to be paid so the renovations did not count as good consideration.
What are the positives and negatives of the rule from Re McArdle?
It supports freedom of contract as it doesn’t force anyone to enter into an agreement. However, there was clear evidence of an agreement so it might be reasonable to expect the money she was promised.
What is the exception to the past consideration rule?
Implied promises of payment. The formal agreement doesn’t take place until after the other party acts but if payment is implied, then the work can be good consideration.
