Consideration Flashcards
complete C
What is consideration?
‘buying a promise’
What are the two types of consideration?
Executed consideration: the act has been carried out
Executory consideration: the act promised has not yet been done
What are the 6 rules of consideration?
-consideration must be sufficient but need not be adequate
-consideration must not be in the past
-consideration is not a pre-existing duty
-consideration must move from the promisor
-consideration may be found where contractual duties are owed to a 3rd party
-part-payment of a debt is not considered satisfaction of the remaining debt
What does the rule ‘consideration must be sufficient but need not be adequate’ mean?
Parties are at liberty to make whatever bargain they like eg. sell at whatever price. Whether or not it is adequate (enough) is for the parties to decide. The court is only interested in whether or not there is sufficient consideration given, which must be real, tangible, and have value in the eyes of the law.
What is the very precise meaning of sufficiency as a rule of consideration?
Real: actually existing as a thing or occurring in fact; not imagined or supposed
Tangible: able to be seen, touched or noticed
Have Some Value In The Eyes Of The Law: as per Chappell v Nestle (chocolate wrapper)
What do the courts not see as being of value?
love and affection or any type of emotion
What two cases support the rule that consideration must be sufficient but need not be adequate?
White v Bluett
Ward v Byham
What does the rule that consideration must not be in the past mean? Give a case to support:
Past consideration isn’t good consideration- this means consideration cant be provided by something that has already been done before the promise of money was made: Roscorla v Thomas or Re McArdle
What is the understanding of consideration that came from Lampleigh v Braithewaite?
There are exceptions -That there was an implied
understanding that a fee would be paid, therefore it was good consideration even though it was in the past
What are the two types of existing duty where consideration can’t be a pre-existing duty?
Legal duty
Public duty
What is an exisiting legal/public duty?
A legal duty is where a person has a responsibility to others to act according to the law.
A public duty is performed b certain people for example, police, fire service and armed forces
Give an example of a pre-existing duty case where there was good consideration and when there was bad consideration:
Bad consideration: Collins v Godefroy - the police officer was already under a public duty to turn up
Good consideration: Glasbrook Bros v Glamorgan CC - the police went above their public duty to send more officers which were requested by Glasbrook
What is an existing contractual duty?
A contractual duty is where a person has a contract and contract sets out the obligations. Where there is a contractual duty and a promise to, for example pay extra for what you are contractually required to do, will not be good consideration
What two cases lay out the pre-existing contractual duty and what were the basic facts of them?
Stilk v Myrick: Where an individual was bound to do a duty under an existing contract, that duty couldn’t be considered valid consideration.
Hartley v Ponsonby: It was unsafe to proceed, the seamen weren’t bound by their original contract of service to proceed with a diminished number f hands. Their undertaking to do so was good consideration
What is the new exception to the consideration rule surrounding making an promise after making the agreement? Give a case:
Where the party making the promise to pay extra is said to receive an extra benefit from the other party’s agreement to complete what he was already bound to do under the existing agreement is good consideration: Williams v Roffey Bros
