consideration Flashcards
purpose of the doctrine of consideration
consideration distinguishes between agreements that are enforceable from those which are
the law will not enforce gratutious promises unless they are in the form of a deed
Re Hudson
the definition of consideration
currie v misa
a reciprocal idea where a benefit is given in return for a promise
definitions of types of consideration
consideration which is an act which has been carried out is called executed
consideration which is a promise is called executory
3 rules of consideration
consideration must be sufficient not adequate
past consideration is not good consideration
consideration must move from the promisee
- consideration must not be past
if the promisee makes a promise after the consideration has been performed the promise is not enforceable as there is no reciprocity
eastwood v kenyon- no consideration when promise to return money
Re McArdle- no consideration, perfromed before promise
criticisisms of the rule that consideration cannot be in the past
roscorla v thomas- does not reflect commercial practise
e.g manufacture garuntee- garuntee is in box after you have bought it so technically no consideration
where the consideration is not ‘past’ (excpetion to the rule)
pau on-
past consideration may be good consideration if
a. the consideration was at the promisors request
b. it was understood between the parties that there would be payment
c. if the promise was made at the time of the act it would have been legally enforcable
lampleigh v braithwait- pardon from the king, past consideration was good
- consideration must move from the promisee
a person to whom the promise is made can only inforce it if they themself provide consideration to the promise
consideration does not need to move to the promisor, the promisee can provide consideration to the benefit of a third party (bolton v Madden)
third parties cannot sue for consideration as they are not parties to the contract
tweddle v atkinson- children gave no consideration for promise so could not sue
(potential ability for 3rd party to sue in rights of third parties act 1999)
- adequacy of consideration
as long as consideration (something of nominal value) is given the law will not examine whether the bargain is good or not
lloyds bank v bundy
must have economic value- white v bluett (not complaining was not sufficient)
performance of exisiting duties as consideration- a public duty
a duty imposed on you by law- e.g public services
performance of duty does not amount to consideration unless they go beyond it
collins v Godefroy- police could not claim extra money for giving evidence (usual duty)
ward v Byham- gone beyond legal duty so was consideration
performance of exisiting duties as consideration- a duty owed to the promisor
performing a duty already owed to the promisor would not amount to consideration as there is nothing extra in return
stilk v Myrick- no consideration as had only fulfilled original task
Hartley v ponsonby- was consideration as had to work harder
williams v roffery- was consideration as there was a practical benefit of avoiding the penalty cluase refind the rule)
william v roffery refind rule of what amounts to consideration of an existing duty
redefined from stilk v myrick
consideration because-
promise had not been obtained by fraud or duress
- d initiated renegotiations
D was aware that original work was under-priced
promisor obtained a benefit or avoided disadvantage
rejected in south caribbean trading v trafigura beheer
a duty owed to a third party
owing a contractual duty to a third party is good consideration for a duty to another party
shadwell v shawell
part payment of debt
part payment of debt is not consideration as the performance is not complete unless another ting is offered in replace of the debt
pinnels case- lesser amount is not consideration
foakes v beer- approved pinnels case
D&C building v Rees- paying less for work was not consideration
may argue practical benefit of getting some money (Re selectmove)- no foakes v beer stands
the doctrine of promissory estoppel
if someone makes a promise to you (e.g not enforcing your debt) and you rely on that promise, then the party will be stopped fom going back on it as it would be unjust
central london property trust v high trees house- estoppeled from going back on promise
