Consideration Flashcards
What is consideration?
Consideration is when each side must promise to give or do something for the other. It can take many forms : service, money, an object, promise to perform an action/to refrain from performing it.
Currie v Misa - Lush J def
A valuable consideration, in the sense of the law, 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.
Forbearance-willingness not to do smth
Dunlop v Selfridge ltd- Sir Fredrick Pollock HOL def
An act or 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.
Forbearance- willingness not to do smth
Executed consideration
when one of the parties has done all that is required of them, leaving the outstanding liability on the other party
Executory consideration
a promise made for a promise (still outsanding hasn’t been executed yet)
The consideration must be sufficient but need not be adequate
- Sufficiency- what is being supplied as consideration(e.g. money, service or object) must be of the type that is regarded in law as capable of supporting the contract.
- Must show itself to be real, tangible and having some economic value.
- Not for courts to decide if it’s the right value or whether there’s been a good or bad bargain
CL: Chappell v Nestle Co.- Chocolate bar wrappers were held to be good consideration.
The consideration must not be past
- This means that consideration cannot be given before the agreement but must come after it.
- It cannot be proved that a bargain actually existed and therefore there is no contract. If the defendant made the promise after the consideration was given, it can only be regarded as an expression of gratitude and is not a binding contract.
- CL: Re Mcardle- The repairs and improvements to an inherited house were past consideration and not payable.
