Consideration Flashcards
What is consideration?
Something which you have agreed to provide in return for a promise (the price of the promise).
What is a bilateral contract in the context of consideration?
An exchange of promises.
What is a unilateral contract in the context of consideration?
A promise in return for an act.
Does consideration need to be of a particular value?
Consideration does not need to be adequate, only that it is of some value (e.g. £1).
Is past consideration valid?
No - the general rule is that performance of a gratuitous act or promise not deemed to be consideration for a later payment.
There are exceptions to this rule.
What is the exceptions to past consideration?
All the following must be satisfied:
The past act/promise was done at the promisor’s request
There was a mutual understanding between the parties that the act/promise would be compensated for in some way
Had the promise been made in advance, with legal relations, the contract would have been legally enforceable
What is the general rule on consideration where a party offers to pay more to meet an agreed deadline on an existing agreement?
This is deemed not good consideration because one party will suffer a detriment and confers a benefit on the other side.
Is there consideration if the parties wish to vary their agreement i.e. more money to work to a closer deadline?
Yes - they are both receiving a benefit.
Are there any exceptions to the rule where if the promisee confers a practical benefit it constitutes consideration?
If it was under duress, any variation will not be binding.
Is part payment of a debt consideration?
No, only if a new element is given in addition to part payment (e.g. offering to pay earlier).
What is promissory estoppel?
The idea that:
If you have made a promise not to enforce your legal rights; and
Someone has relied on that promise, even though they have not provided anything in return; then
if you try and enforce your promise your legal rights will be estopped.
In court proceedings, how can promissory estoppel be used?
Only as a defence when a party brings an action at common law to enforce their legal rights
