CONSIDERATION

Question 1

What are the two types of consideration? (2)

Answer 1

-executed consideration - an act in return for a promise.
-executory consideration - a promise for a promise.

Question 2

what cases define consideration? (2)

Answer 2

• Currie v Misa (1875)
  -Dunlop v Selfridge ltd (1915)

Question 3

how did Currie v Misa (1875) define consideration? (1)

Answer 3

some right, interest, profit or benefit accruing to one party or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other.

Question 4

how did Dunlop v Selfridge (1915) define consideration? (1)

Answer 4

an act or forbearance of one party or the promise thereof, is the price for which the prom be of the others is bought, and the promise thus given for value is enforceable.

Question 5

what is the difference between executed and executory consideration? (1)

Answer 5

when consideration has been performed it is said to be executed, if it is yet to be performed it is said to be executory.

Question 6

what are the 5 rules of consideration? (5)

Answer 6

1. consideration need not be adequate but must be sufficient
2. past consideration is not good consideration
3. consideration must move from the promisee
4. performing and existing duty cannot be the consideration for a future contract
5. a promise to accept part payment of a pre-existing debt in place of the whole debt is not consideration

Question 7

what is meant by adequacy? (1)

Answer 7

the idea of adequacy is that the parties to the contract themselves agree that the value of the things being exchanged is acceptable.

Question 8

what cases cover adequacy? (2)

Answer 8

-Thomas v Thomas (1842)
- Chappell v Nestle co ltd (1960)

Question 9

what is meant by sufficient? (1)

Answer 9

means the consideration must be real and have some value, real consideration must exist and must be definite and have at least nominal amount of value.

Question 10

what cases cover sufficiency? (3)

Answer 10

-Chappell v Nestle co ltd (1960)
-White v Bluett (1953)
-Ward v Byham (1956)

Question 11

what is meant by past consideration is not good consideration? (1)

Answer 11

means that consideration has no value where it has already been done at the time the agreement is made. it is not the price for which the promise is bought as it had been completed before the agreement was made.

Question 12

what cases cover past consideration is not good consideration? (4)

Answer 12

-Re McArdle (1951)
-Re Caseys patent (1892)
-Lampleigh v Braitwait (1615)
-Roscoria v Thomas

Question 13

what is the exception to past consideration is not good consideration? (1)

Answer 13

when there is the promisers expressed or implied request for a particular task and there must be an implied understanding that the task should be paid for.

Question 14

what rules cover the exception to past consideration is not good consideration? (3)

Answer 14

1. an express of implied request by the promiser to the promisee to perform
2. an implied promise inherent in the request that the promiser will pay the promisee a reasonable sum for performing the task.
3. the performance of the task and the payment of thee money by the promiser to the promisee for that performance.

Question 15

why might judges implement consideration? (1)

Answer 15

a promise to be contractually bound is not usually enforceable unless enforceable by consideration and yet judges may implement consideration to comply with the formal requirements (to comply with sanctity of contract)

Question 16

what approach do courts take to contract law? (1)

Answer 16

the courts take a Laissez Faire approach except in circumstances where there is unequal bargaining power and one side has taken advantage.

Question 17

what is the 1st rule of consideration? (1)

Answer 17

‘consideration need not be adequate but it must be sufficient’

Question 18

what is meant by past consideration? (1)

Answer 18

must be a mutual exchange of promises, if one party carries out an act voluntarily and a second party later promises to pay or contribute to this act, this is called past consideration.

Question 19

what cases cover past consideration? (1)

Answer 19

Roscoria v Thomas

Question 20

what case shows the harshness of the past consideration rule? (1)

Answer 20

McArdle (1951)

Question 21

what are the exceptions to the rule of past consideration? (1)

Answer 21

implied promises to pay for an act are the only exception to the past consideration rule.

Question 22

what cases cover implied promises to pay? (1)

Answer 22

lampleigh v Braitwait (1615)

Question 23

what is meant by performing an existing duty? (1)

Answer 23

if a person is required to do something already by law or by contract they cannot claim that this duty is consideration.

Question 24

what cases cover performing an existing duty? (4)

Answer 24

-collins v Godefroy
-Glasbrook bros v Glamorgan CC
-Stilk v Myrick
-Hartley v Ponsonby

Question 25

what is the exception to the rule of performing an existing duty, in terms of an existing legal/public duty? (1)

Answer 25

if a person is legally obliged to do something but goes beyond that then this ‘extra’ provides consideration.

Question 26

what case covers performing an existing duty, in terms of an existing legal/public duty? (1)

Answer 26

Hartley v Ponsonby

Question 27

what case covers performing an existing duty, in terms of an existing contractual duty? (2)

Answer 27

Shilk v Myrick
Hartley v Ponsonby

Question 28

what is the exception to the rule of performing an existing duty, in terms of an existing contractual duty? (1)

Answer 28

occurs where thee party making the promise to pay extra is said to receive an extra benefit from the other parties agreement to complete what he was already bound to do under the existing agreement.

Question 29

what case covers performing an existing duty, in terms of an existing contractual duty? (2)

Answer 29

Williams v Roffley (1990) and Re selectmove

Question 30

what is meant by consideration must move from the promisee? (1)

Answer 30

a person cannot sue or be sued under a contract unless they have provided consideration for it.

Question 31

what is meant by the rule of part payment? (1)

Answer 31

a promise to accept part payment of an existing debt in place of the whole debt is not consideration.

Question 32

what cases cover the rule of part payment? (2)

Answer 32

Pinnels case (1602) and Foakes v Beer (1884)

Question 33

what cases cover the exception to the rule of part payment? (2)

Answer 33

central London property trust v high trees house ltd (1947) and D and C builders v Rees (1965)

Question 34

what are the limitations of consideration? (4)

Answer 34

operates to modify existing obligations in a contract - cannot found a new contract
promisee must have relied on the promise to their determent
may only suspend rights but not distinguish the right of the promisee
since promissory estopped is an equitable principle the party must show how they acted equitably

Question 35

what occurred in the case of Thomas v Thomas and give the date. (4)

Answer 35

the court will not interfere if one party has made bad bargain.
Mrs Thomas remained in the family home per the request of her dead husband who made a contract with her, she would be allowed to stay there for £1 a year, this was not commercial rent and therefore the contract stood. (1842)

Question 36

what occurred in the case of Re McArdle and give the date. (4)

Answer 36

some family members redecorated the family home with the other family members promising to pay some form of compensation towards them, they did not have to enforce their promise as the act had already been done and therefore was considered past consideration. (1951)

Question 37

what occurred in the case of Pinnels case and give the date. (2)

Answer 37

a creditor is able to claim the reminder of the debt if the creditor has agreed with the debtor that a part payment by the debtor shall clear the debt. (1602)

Question 38

what occurred in the case of Foakes v Beer and give the date. (4)

Answer 38

Foakes owed Beer a large sum of money and they agreed he would repay by instalments and Beer would do nothing more. Beer then asked for interest and Foakes refused. Foakes was giving Beer no consideration to be allowed to pay in instalments therefore Beer was entitled to sue for the full amount and interest. (1884)

Question 39

what occurred in the case of D and C Builders v Rees and give the date. (4)

Answer 39

builders owed money by Rees but agreed to accept a lower amount in full settlement as the builds were nearly bankrupt. the builders were able to claim the balance of the remaining settlement. (1966)

Question 40

what is the difference between the foakes v Beer case and the D and C builders v Rees case? (2)

Answer 40

-Rees reduction was due to economic pressure on the builders who had a cash-flow problem
-Foakes no such pressure and original payment by instalments had been reached with mutual consent.

Question 41

what are the exceptions to the rule of part payment? (2)

Answer 41

accord and satisfaction
promissory enstoppel

Question 42

what is meant by accord and satisfaction? (1)

Answer 42

if the debtor agrees to pay a small amount on a date earlier than originally agreed or in cash when a cheque was originally agreed then the debtor provided consideration for the new agreement.

Question 43

what is meant by promissory estoppel? (1)

Answer 43

if one party to an existing contract (the promisor) promises to vary the contract (for the others benefit) and the other party (the promisee) relies on the promise to vary then the promisor cannot go back on the promise.

Question 44

what occurred in the case of central London property trust ltd v high trees house and give the date. (4)

Answer 44

promisee intended to be binding, intended to be acted upon and in fact acted on but without consideration from the other party, is binding. (1947)

Question 45

what occurred in the case of Re selectmove and give the date. (4)

Answer 45

confirmed the courts are unlikely to extend the concept of promissory estoppel to cases other than those involving debt - did not apply as it undermined the need for consideration, and highlights the reluctance of courts to use the principle used in high trees. (1995)

Question 46

what is meant by an existing duty? (1)

Answer 46

if a contractual party performs an existing duty (and no more) then this performance cannot be considered consideration for a new contract

Question 47

what occurred in the case of Stilik v Myrick and give the date. (4)

Answer 47

the captain did not pay extra wages as the crew only did the work they would have had to do anyway. (1809)

Question 48

what occurred in the case of Collins v Godefroy and give the date. (4)

Answer 48

performing a public duty does not amount to consideration for another contract as the duty would have been performed anyway. (1831)

Question 49

what occurred in the case of Scotson v Pegg and give the date. (4)

Answer 49

when scotson agree to deliver coal to anyone nominated by X. X nominated pegg (the third party) and scotsman made the delivery. Scotsman sued pegg and pegg claimed that there could be no contract as Scotson would have performed the duty for X anyway. It is possible for the same consideration to two different parties. scotson won against pegg. (1861)