consideration Flashcards
what is consideration
idea that in contract law English law means an exchange or bargain a gratitudes promise is not a contract.
a party that claims that a promise of undertaking which has been made to them is contractually binding mist show that they have given consideration for the promise.
rules of consideration.
1- consideration must move from the promise person whos promise was made to has to show that consideration needed to come from them eg prince v Easton
2- consideration must be in respect of the promise Combe v Combe.
3- past consideration is no consideration roseola v Thomas something in th past cane something for the future
what counts as consideration.
must be sufficient but not adequate.
must be something of value does not have to be Fair or correct value.
hence peppercorn consideration money is always sufficient because it has value something with value even if it is a penny.
what happened in Chappell v nestle 1960.
used chocolate par wrappers can be good consideration where they are effectively part of the price wrappers have value have to pay to get the chocolate.
Thomas v Thomas
could live in property and payd 1 pound in rent a year and upkeep the repair was that consideration court said that it was consideration sufficient but not adequate.
Shadwell v Shadwell
uncle would pay 150 pounds a year I he married Ellen nickel he was already engaged to her uncle stopped paying the money marriage could not be consideration but the court said that when he got married there was a change of legal change of contract.
what does not have value in the eyes of the law .
undertaking to perform existing duties owed under the general law.
ward v bayan unmarried couple with a daughter the mother had legal responsibility to look after the child father has no obligations to care father paid money then he stopped paying said that there was no consideration she only promised to do existing duties court said in addition to looking after the child she has to keep her happy and let the child make decisions about the father this was additional therefore consideration.
modern challenge to consideration.
comes under strain when applied to modern commercial transactions.
this is the case for agreements to modify an existing contractual obligation.
example of the traditional approach. still v myrick 1808 2 camp 316
contract to sail to the baltic and back.
two of the sailors desert and the captain said that he would split their wages with the rest of the crew if they stayed and completed the journey there was no consideration here as they were contractually obliged to do that anyways. they said that they would do all they could in an emergency.
Hartley v ponsonby 1857.
sis from Liverpool to Australia then somewhere else as directed for a term not exceeding 3 years.
had to be 36 men on the ship on arrival in Australia 17 of th crew refused to work and were sent to prison could not continue with only 19 men meaning the rest of the crew were legally entitled to stop working captain promised additional payment for those if they kept going by agreeing to working in dangerous conditions exceeded their contractual duties and provided consideration.
rule for contracts of debt. rule in flakes v beer.
part payment of a debt is not good consideration for a promise to accept the lesser sum in full satisfaction of the debt.
payment of lesser sum than the amount owed may be consideration in combined with something other than money eg hawk or robe or the payment is made at an earlier date or at a different location stipulated form the contract.
zlidewells five point rule.
A- If a entered into a contract with be doing work or supplying goods in return b makes payment
B- At some stage before a had completely performed his obligations under the contract has reason to doubt whether a will be able to complete their side of the bargain.
C- B promised additional payment in return for a’s promise to perform his contractual promise on time
D- As a result of promise b obtains in practice a benefit
E- B’s promise is not given as a result of economic duress or fraud on the part of a
F- The benefit to b is capable of being consideration for b’s promise.
Mwb v rock advertising.
Mwb granted rock a licence of a larger unit within the serviced office space which they owned an managed.
Rock was a longstanding customer could not pay the rent and fell into arreas this gave mbw a right to lock them out and sue for the full amount owed
Instead of this mwb credit controller agreed rock could reschedule the payment lowering the amounts initially and higher amounts later so that within a year the payments would be cleared
Rock made the first payment under this agreement arguing that it was not supported by consideration.
