Consideration Flashcards
What does Consideration mean?
Each party must give sth in return for other’s promise
What if no consideration is given?
There is no enforceable contact
What are some examples of Consideration in Bilateral Contracts?
- Promise to pay sum of money
- Promise to sell land
- Promise to buy a car
Who is the promisee and promisor?
Promisor = makes the promise
Promisee = seeking to enforce a promise
What are 2 essential requirements for Consideration?
Benefit/Detriment requirement
Bargain requirement
What is a Bargain requirement?
Benefit or detriment must be given in return for the promise
What is the Benefit/Detriment requirement?
Promisee MUST grant a benefit (usually on the promisor) or a detriment
How does consideration move from the promisee?
Where 2 parties are JOINT promises, consideration MAY BE PROVIDED by one on behalf of another
Does Consideration need to be adequate? (adequate means fairness of exchange)
- Nominal consideration will be sufficient consideration
Why is adequacy not relevant in some cases? And what case proves this?
Woolworths v Kelly
1. Different ppl have different values
2. Judges NOT qualified to give opinions
3. If courts were to assess adequacy, this would require MASS amounts of time
Does Consideration need to be ‘sufficient?’
yes!
What are 3 ideas that are NOT sufficient consideration?
- Past consideration
- Illusory Consideration
- Existing Legal duty
What is past consideration?
- Action already done by the promisee before the promisor makes the promise/reward
What is Illusory consideration?
Promise that is illusory (not real)
What is an existing legal duty?
Promise to perform a pre-existing legal duty is NOT good consideration (There are 5 exceptions)
