Consideration Flashcards
Nature of Consideration
Thomas v Thomas
Consideration must flow between both parties. Peppercorn principle, value in the eyes of the law.
Nature of Consideration
Governers of Dalhousie v The Estate of Arthur Butler
Exchange of two unrelated promises is not consideration. One promise must be conditional on the other. Nudum Pactum.
Dalhousie building things was not conditional on the consideration from Arthur
Past Consideration
Eastwood v Kenyan
Past consideration is seperated in time therefore there is no exhange of promises. Lacks mutuality.
No consideration if one party lacks any connection to the other at the time of performance.
Past Consideration
Lampleigh v Brathwait
Reasonable to assume that you will be compensated for an act engaged with the party that made a later promise is good consideration.
Forebearance of suit
DCB and Halord Arkin v Zellers
Forebearance consideration is valid even if the underlying suit is invalid if
1. Honestly believe its valid
2. Objectively reasonable belief
3. Seriously intended to pursue the claim
Pre-Existing Duties
Pao On v Lau Yiu Long
Third party pre-existing duty. Taking on additional liability can constitute consideration.
Pre-Existing Duties
Stilk v Myrick
Promise to pay more for a pre-existing duty is not sufficient consideration. No fresh consideration.
Pre-Existing Duties
Gilbert Steel v University Construction Ltd
Modern Example of Stilk.
Pre-Existing Duties
William v Roffey Bros
Practical Benefit can constitute consideration.
Commercial advantage.
No duress as assessed in context.
Pre-Existing Duties
Greater Fredericton Airport Authority v Nav Can
Canadian context of William Raffey.
Removes the necessity of mutual interest, focuses on duress.
To establish economic duress, two conditions must be met:
1. the promise must be made under pressure (demand/threat);
2. the pressured party must have no option but agreeing.
If these conditions are met, three factors must be analyzed:
1. was the promise supported by consideration?
2. was the promise made “under protest”?
3. were reasonable steps taken to disaffirm the promise?
A post-contractual modification, unsupported by consideration, may be enforceable if it is established that the variation was not procured by economic duress.
Pre-Existing Duty
Rosas v Toca
- When you look at the question of whether there was duress, ask yourself whether there was mutual or practical benefit.
- If the modification is mutually beneficial to both parties, then it is a pretty good indication that there was no duress.
- If one party is not getting anything new, while one benefits, then this may suggest (not confirm) that there is duress.
Accord in Satisfaction
Promise to Accept Loss
What flows from the debtor that would could as consideration. Agreeing to pay less is impossible without satisfying the original contract
Because of historical reasons these are treated differently than promises to pay more
Accord & Satisfaction
Foakes v Beer
Pinnels case principle: Paying less in satisfaction of more
This could be displaced by a peppercorn, because it is a novel element not covered in the existing obligation.
Accord & Satisfaction
Foot v Rawlings
Anything new can constitute consideration.
Cheques vs cash
Accord & Satisfaction
Process Automation v Norstream Intersect in
If there is duress then the Law and Equity act will not apply
Promissory Estoppel
4 Elements of PE
1) there must be a pre existing relationship between the parties
2) There must be a clear representation between the parties that something wont be strictly enforced in the pre existing contract (implicit, or explicit)
3) The party then must rely on that interpretation, meaning you must change your position in some way.
4) lastly it must be deemed unfair in the language of equity to disregard that promise.
Promissory Estoppel
Hughes v Metropolitan Railway
Pre-dates PE though textbook
Raises all 4 points of PE.
Promissory Estoppel
Central London Property v High Trees House
Creation of PE
Promissory Estoppel
Collier v P&MJ Wright
Foakes and Beer is Inapplicable if you can raise PE
Promissory Estoppel
John Burrows v Subsurface Surveys
Focuses on Element 2
Clear representation is a high threshold, though could still be implied.
This case: Friendly Indulgence
Promissory Estoppel
D&C Builders v Rees
4th element of PE wont be satisfied if 2nd element procured under duress.
Duress:
1. Illegitimate pressure.
2. Person had no practical choice but to agree with pressure.
Promissory Estoppel
Saskatchewan River Bungalows v Maritime Life Assurance
Can 2nd PE be revoked? Yes
1. If you give notice that you are taking it back (reasonable notice).
2. If you give notice that it’s being taken back BEFORE it’s relied on.
Reliance:
1) Causal reliance -> changed position and acted in some way, not something you would have done but for the representation.
(2) Detrimental reliance -> reliance on It’s own isn’t enough, you need to show you not only changed your position but changed it in a way that is detrimental.
Promissory Estoppel
WJ Alan and Co v El Nasr Export
No need for detrimental reliance under 3 of Pe. Acting on a promise is sufficient.
Promisorry Estoppel
The Post Chaser
Under third element of the test, Will it be inequitable to go back on a promise if going back on it will not be detrimental
Promissory Estoppel
Trial Lawyers of BC v Sun Alliance
The SCC held that you do need detrimental reliance to raise and estoppel.
Promissory Estoppel
Combe v Combe
Estoppel does not create a cause of action, it can only be used as a shield.
Estoppel can only be raised if there is a right to something
Promissory Estoppel
MN v ATA
Sword V Shield
PE would require an antecedent contractual relationship and a promise not to enforce a particular right which she relies on, and then it would be inequitable for him to take that promise back and then try to enforce the right.
