Consideration

Question 1

What is Consideration？

Answer 1

Consideration is a mutuality of offering an act or a promise to do something or not do something, may consist either in some right interest, profit, or benefit accruing to the one party or some forbearance, detriment, loss, or responsibility given, suffered, or undertaken by the other party.

Question 2

Exceptions to consideration:

Answer 2

1) Contracts under seal – cross-pages seal?
2) Contracts without consideration are enforceable under promissory estoppel

Question 3

Consideration must have: rights/interest/ profit/ to other party, is not an exhausted definition

Answer 3

1) value: not in terms of commercial or economic but value in the eyes of the law, which comes from the mutuality of exchange (that is “consideration”, the exchange part, I am doing this for you in considering you do that for me) of obligation to do or not do something (Thomas v Thomas)
2) mutuality of exchange one promise must be conditional on the other (Dalhousie)
3) promise does not have to move to the parties it only has to flow from both parties (Thomas v Thomas)

Question 4

What is the point of the doctrine of consideration?

Answer 4

• essence of the bargain theory of contract: idea something is only a bargain if there is an exchange
  o if it doesn’t have mutuality of each doing something it is not a bargain and it is a gift
• gift does not have mutuality, it is unilateral
• consideration serves as an analytical device to distinguish gifts (in essence property law)from contracts