Consideration

Question 1

Meaning of consideration

Answer 1

In order to be able to enforce a promise made to you, you must be able to show that you agreed to provide something in return for that promise.

Question 2

Executed consideration

Answer 2

at the time of the formation of the contract, the consideration has already been performed

Question 3

Rules governing consideration

Answer 3

consideration:
- must not be past
- need not be adequate
- must move from the promise
- must be sufficient

Question 4

Consideration must not be past

Answer 4

consideration must be given in exchange for the promise of the other party

Question 5

exceptions to the past consideration rule

Answer 5

1) the act must have been done at the promisor’s request
2) the parties must have understood that the act wad to be rewarded either by a payment or the conferment of some other benefit
3) the payment, or conferment of other benefits, must have been legally enforceable has it been promised in advance

Question 6

Consideration must move from the promisee

Answer 6

a party who has not provided consideration may not bring an action to enforce a contract

Question 7

Consideration need not be adequate

Answer 7

the law requires the parties to have entered into a bargain where each side has provided something of value that the courts can see.

Question 8

consideration must be sufficient

Answer 8

Consideration must have some value ‘in the eyes of the law’.

Question 9

Can an obligation from an existing contract be good consideration?

Answer 9

No, if there is no new obligation

Question 10

Williams v Roffey

Answer 10

Although no new obligation was in this case, court considered that promise provided practical benefit for promisor.

Question 11

Are obligations under a public duty good consideration?

Answer 11

carrying out merely a public duty does not amount to sufficient consideration but if person went above public duty, it is sufficient consideration

Question 12

Can an existing contract with a third party be a good consideration?

Answer 12

The performance of the pre-existing duty owed to a third party will be regarded as sufficient consideration for a promise given by the promisor.

Question 13

Can part payment of debt be good consideration?

Answer 13

No, because they’re doing something they’re already obliged to do.

• debtor remains liable even where the creditor has agreed to release them from further liability.
• Simply paying a smaller sum than that owed will not be sufficient consideration.

Question 14

Promissory estoppel

Answer 14

• an equitable doctrine that allows a promise to be enforced despite not being supported by consideration
• equity prevents, or ‘estops’, the promisor from going back on their promise in situations where the promisee has relied on it

Question 15

Can a party issue a claim based on promissory estoppel?

Answer 15

No, it can be used as a shield not a sword, can be used as defence not cause of action.

Question 16

What does it mean for estoppel to be ‘a clear and unequivocal promise that strict legal rights will not be fully enforced’?

Answer 16

Promise must be intended to affect legal relations and not simply amount to a gratuitous privilege given to the
promise.

Question 17

What does it mean for it to be inequitable to allow the promisor to go back on their promise?

Answer 17

If it would be inequitable to allow promisor to go back on their promise, then the defence will apply and the promisor will be estopped from going back on their promise.

Question 18

Which rule of consideration does promissory estoppel provide an exception to?

A. Consideration must move from the promisee.

B. Part payment of a debt without fresh consideration does not discharge the debt obligation.

C. Consideration must not be past.

D. Consideration must be sufficient but need not be adequate

Answer 18

B