Consideration

Question 1

Define contract
2 parts

Answer 1

A contract is a legally binding agreement between two or more parties.
A contract is made up of 4 essential elements, an offer which must be accepted, consideration from both parties and the intention to create legal relations

Question 2

Define consideration
2 parts

Answer 2

Defined as the “thing of value” that is exchanged. It is the price for the promise and it is the benefit and detriment on both sides
Both parties must provide consideration as the general rule is that only those who provide consideration will have rights under that contract.

Question 3

Define sufficient but not adequate
1st case

Answer 3

consideration must be sufficient but need not be adequate meaning you must exchange something of value, although it is not for the courts to decide if you got a good deal ( Chappel V Nestle )

Question 4

Sufficient not adequate
2nd case

Answer 4

Consideration must be “real” meaning it must exist (white v bluett)

Question 5

First side rule

Answer 5

Performance of an existing contractual duty, already do what you were bound to do (Stilk v Myrick)

Question 6

Exceptions for performance of a contractual duty

Answer 6

1. doing something extra is good consideration ( Hartley V Ponsonby)
2. if the party gains an extra benefit (Williams V Roffey)

Question 7

2nd side rule

Answer 7

Past consideration, is not good consideration
By the time the agreement takes place the consideration is already done
Where the consideration is past there will not be a valid contract (Re McArdle)

Question 8

Exception for past consideration

Answer 8

where there is an implied promise to pay for a particular task BEFORE the consideration is done, this is enforceable
( Lampleigh V Braithwaite)

Question 9

3rd Side rule

Answer 9

Part payment of a debt
This is a rule from PINNELS Case
If you agree to only part payment of a debt owed to you, you can still claim the rest

Question 10

Exceptions for part payment of a debt + case

Answer 10

1. accepting something other than money for the debt
2. paying a smaller amount on a date earlier than agreed
3. repay part of the debt on the due date at a different place at the request of the debtor
   ( D&C Builders V Rees)

Question 11

what can be used as an equitable remedy

Answer 11

Promissory Estoppel
If you make a promise that the person relies on to their detriment the promisor is ESTOPPED from breaking that promise

Question 12

4th side rule

Answer 12

Privity of a contract
only those who give consideration have rights under the contract
(Tweedle V Atkinson)

Question 13

Exception for privity of contract

Answer 13

Contract (rights of 3rd party) act 1999
a person who is not a party to a contract can enforce the contract if he is named in the contract or gains a benefit from it