Consideration Flashcards
What is consideration in contract law?
Consideration is the mutual exchange of something of value between parties, making the contract legally binding.
Which case established that consideration involves a benefit or detriment?
Currie v Misa (1874-75) established that consideration may involve a benefit to the promisor or a detriment to the promisee.
What must be proven before enforcing an agreement?
Before enforcing an agreement, you must prove that you promised something of economic value in return (Tanner v Tanner 1975).
How did Sir Frederick Pollock describe consideration?
Pollock described consideration as the “price of the promise,” meaning both parties must provide something of legal value in exchange.
What is the main alternative to consideration?
The main alternative to consideration is reasonable reliance, where obligations are created by actions and reliance on those actions rather than an exchange of promises.
Can a promise be considered valid consideration?
Yes, a promise to act or forbear from acting can be valid consideration.
What was established in Dunlop Pneumonic v Selfridge regarding consideration?
It was established that “an act of forbearance, or the promise thereof, is the price for which the promise of the other is bought,” making the promise enforceable.
Does consideration require both a benefit to the promisor and a detriment to the promisee?
No, consideration does not require both; it can be either a benefit to the promisor or a detriment to the promisee.
What does “Consideration must be sufficient but need not be adequate” mean?
Consideration must have some economic value, but it doesn’t need to be of equal value. Even minimal or seemingly unfair consideration is sufficient (Thomas v Thomas 1842).
Can forbearance be sufficient consideration?
Yes, forbearance (agreeing not to sue) is sufficient consideration if the promisor requested it (Alliance Bank v Broom 1864).
Must consideration have economic value?
Yes, consideration must have some economic value, even if minimal (White v Bluett 1853, Chappell & Co Ltd v Nestle Co Ltd 1960).
Who must provide consideration for a promise to be enforceable?
Consideration must move from the promisee, meaning the promisee must provide something of value, but it need not go to the promisor.
What is “past consideration” and is it valid?
Past consideration is something promised or done before the contract was made, and it is not valid consideration (Roscorla v Thomas 1842).
What is the exception to the rule that past consideration is no consideration?
Past consideration can be valid if the act was done at the promisor’s request, both parties understood payment would be made, and payment would have been enforceable had it been promised in advance (Pao On v Lau Yiu Long 1980).
Is performance of an existing public duty valid consideration?
Is performance of an existing public duty valid consideration? Is performance of an existing public duty valid consideration?
Can performance of an existing contractual duty be valid consideration?
Generally no, but if there’s an additional practical benefit or extra effort beyond the original duty, it can be valid (Stilk v Myrick 1809, Williams v Roffey 1991).
Is performance of a contractual duty owed to a third party valid consideration?
Yes, performing a duty owed to a third party can be valid consideration (Shadwell v Shadwell 1860, Scotson v Pegg 1861).
What is the rule in Pinnel’s Case regarding part-payment of a debt?
Part-payment of a debt is not valid consideration unless something extra of value is added (e.g., an item or early payment) (Pinnel’s Case 1602, D&C Builders Ltd v Reese 1966).
What is an exception to the rule in Pinnel’s Case on part-payment of a debt?
If something of additional value is given (e.g., an item), it may be valid consideration even if the payment is less than the debt (Vanbergen v St Edmunds Properties Ltd 1933).
Can early payment of a debt be valid consideration?
Yes, early payment can be valid consideration if it benefits the creditor more than receiving the full amount later (Sibree v Tripp 1846).
