Consideration Flashcards
What is consideration?
Some right, interest, profit, or benefit accruing to one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other
What is the underlying principle of consideration?
Reciprocity- A promisee should not be able to enforce a promise unless he has given or promised to given something in exchange for the promise unless the promisor has obtained something in return
What are the elements of consideration?
The promisee acts to their detriment in reliance of the promise, giving something in value for the promise
What are the rules of good consideration?
Consideration must be sufficient but need not be adequate
Past consideration is not good consideration
Consideration must move from the promisee
What is the general rule regarding sufficient consideration?
The courts will not enforce a promise unless something of value is given for the promise
What is the main authority for sufficient consideration?
Chappell v Nestle
What does the law recognise as value?
Must be sufficient but need not be adequate
What is past consideration?
An act performed before the time the promise was made. This is not good consideration. The action must correspond with the promise
What is the leading case law for past consideration?
Eastwood v Kenyon; Roscolora v Thomas
What are the exceptions to past consideration?
Where there may be an implicit assumption
What is the test for implicit consideration?
Pao On v Lau Yui Long- The doctrine of implied assumpit
What was the test for implicit consideration?
Was the act done at the request of the promisor
Was there an understanding of payment at the time?
Would the contract otherwise be enforceable?
What is an existing obligation?
Promising to do something that is already expected of you. It is not good consideration because nothing is being given up.
What is the general rule where there is an existing obligation of a public body?
Harris v Sheffield- an existing consideration can amount to good consideration where the promisee goes over and above their basic obligation
What is the general rule for an existing duty owed to a 3rd party?
Scottson v Pegg- there is good consideration from each party due to the provision of each party with an independent right to sue on the failure to unload.
What is the general rule for an existing contractual duty?
Stilk v Myrick- existing contractual obligations is not good consideration
In which case was this distinguished from?
Hartley v Ponsonby- essence of the contract had changed requiring a different undertaking of the sailors. = good consideration (action was over and above their existing contractual promise)
What was the principle established in William v Roffey Bros?
Where the promisor obtains a practical benefit or obviates a disbenefit, this may amount to good consideration
What was the test set out in Williams v Roffey Bros?
A has a contract with B
B has reason to doubt A’s performance
B promises extra to perform on time
B obtains a practical benefit or obviates a detriment
Promise was not given as a result of fraud or duress
What is the general rule for part payment of debt?
Does not discharge the obligation to pay the full amount and is not good consideration
What is the exception to the rule?
Pinnel’s case- if one promises to pay part of the debt and an additional element = good consideration
What is the principle of promissory estoppel grounded in>
The quality of being fair and impartial
Which case introduced the general rule of promissory estoppel?
Central London Property Trust v High Trees House
Does Promissory estoppel extinguish the promisor’s legal rights?
No- the effect is suspensory until it is equitable to claim
What are the elements of promissory estoppel?
A clear, unequivocal promise to suspend existing contractual rights
Change of position by promisee in reliance of the promise
Can only be used as a shield not a sword - only a defence against someone trying to enforce a right against you (Combe v Combe)
Which case illustrates that the promisee’s position must have been altered in reliance of the promise?
Ajayi v Briscoe
Can you claim for the missed payments during the suspension period?
No- from the moment it becomes equitable to reinstate legal rights
What is the leading case on performance of an existing duty?
Ward v Byham
Why was consideration found in Ward v Byham?
The mother went above her legal obligation to which the father obtained a practical benefit
What is estoppel?
Where A has, by his words of conduct, justified B in believing that a certain state of facts exists, and B has acted upon such belief to his prejudice. A is not permitted to affirm against B a different state of facts existed at the same time
What does estoppel relate to ?
The legal rights of the promisor
What are the elements of promissory estoppel?
There is a promise or representation as to future conduct, intended to affect the legal relations between the parties.
Clear and unequivocal indication that promisor will not insist on strict legal rights.
Promise is relied upon by the promisee- submit to a course of action that he would not have otherwise adopted.
Inequitable for promisor to go back on his promise
When can a promisors legal rights be reinstated?
By giving reasonable notice
What is the leading case for proprietary estoppel?
Pascoe v Turner (relates to the acquisition of an interest in property)
