consideration

Question 1

consideration

Answer 1

• essential element in a binding contract
• an act of forbearance or the promise thereof is the price for which the promise of the other is bought, and the promise thus given for value is enforceable

Question 2

who proposed the consideration definition?

Answer 2

Dunlop v Selfridge

Question 3

rules of consideration

Answer 3

• must move from the promisee
• must not be past
• must be sufficient but need not be adequate

Question 4

consideration must move from the promisee

Answer 4

a person to whom the promise was made for can enforce that promise only if they have themselves provided the consideration from it
-> the promise cannot be enforced if the consideration moved from a third party

Question 5

Tweddle v Atkinson 1861

Answer 5

• William; son of Tweddle
• Daughter of William Guy; intends to marry
• Tweddle + Guy in writing -> both pay money to husband; Tweddle
• Guys executors refused to pay
• sued executors to the estate
  LP: CLAIM FAILED!
  -> even though named agreement, had not given himself consideration for such agreement

Question 6

Tweddle v Atkinson 1861 - Analysis

Answer 6

• case made clear a person seeking to enforce a promise must have supplied consideration for it
• [excludes 3rd parties]

Question 7

consideration must not be in the past; 3 types to explain this

Answer 7

• executory
• executed
• past

Question 8

executory consideration

Answer 8

• arises where promises are exchanged to perform acts in the future
  e.g. ‘I promise to deliver a pizza if you pay on deliver’ [bilateral contract .. enforceable]
• if I deliver + you don’t pay, I can sue for breach of contract

Question 9

executed consideration

Answer 9

• arises where one party performs an act in order to fulfil a promise made by the other
• typical of reward contracts
  e..g if I offer £100 to anyone who can provide information that helps me track down my long-long sister, and you do so, then I am bound to pay you under this unilateral contract

Question 10

past consideration

Answer 10

• basic principle is that the consideration for a promise must be given in return for that promise
  e.g. if I clean your windows and once im done you promise to pay me £10 for doing so, I cannot enforce your promise; as I didn’t clean your windows in return for that promise, the promise was made after the act was done

Question 11

Re McArdle 1951

Answer 11

• son + wife lived in mothers house
• mother died, house was to pass to son and x3 other children
• sons wife paid for repairs + improvements to property
• mother made her x4 children sign an agreement to pay her daughter-in-law back from the proceeds of her estate
  -> mother died + children refused to pay
  -> DIL claim unsuccessful; already performed act before promise had been made; therefore consideration was past, + promise to pay was unenforceable

Question 12

Re McArdle 1951: analysis

Answer 12

• if a guarantee is made in respect of something after it has been sold, then there is no consideration for that guarantee, and it is not binding

Question 13

exception to general rule that consideration must not be past -»

Answer 13

Lampleigh v Braithwaite 1615

Question 14

Lampleigh v Braithwaite 1615

Answer 14

• Braithwaite had killed another man, asked Lampleigh to secure a pardon
• L went to considerable effort and expense to secure pardon
• B subsequently promised to pay Lampleigh £100
• B failed to pay, L then sued

Question 15

Lampleigh v Braithwaite 1615: legal principle

Answer 15

• L claim successful; even though past consideration -> his efforts were in the past in relation to the promise to pay
• court, considered the og request by B a contained implied promise that he would reward and reimburse L for his efforts
• therefore, previous request + subsequent promise were part of the same transaction and were enforceable

Question 16

Lampleigh v Braithwaite 1615: analysis

Answer 16

• law for over 400 years and considered positively by the Supreme Court
  -> if services are rendered on request, where both parties understand that payment will be made, the promise may be enforceable even though consideration is in the past

Question 17

rules of Lampleigh v Braithwaite 1615 outcome principle

Answer 17

• established in Pao On v Tau Yiu Long
  -> act must have been done at the promisors request
  -> the parties must have understood that the act was to be remunerated further by a payment
  -> the payment must have been legally enforceable had it been promised in advance

Question 18

consideration must be sufficient but need not be adequate

Answer 18

• as long as the consideration has some value, the courts cannot concern themselves with its adequacy
  e.g. if I freely decide to offer to sell you my new phone for 20p and you accept, then this is sufficient to render the contract binding, even though it is seemingly not a fair exchange

Question 19

Thomas v Thomas 1842

Answer 19

• husband expressed wish that his wife should be allowed to remain in their house after his death; not written in his will
• after his death, his executors allowed wife to stay at rent of £1py; later tried to dispossess her

Question 20

Thomas v Thomas 1842: legal principle

Answer 20

payment of rent was sufficient consideration for the contract to be enforceable
-> the husbands wish alone however, would not have been sufficient consideration for the contract to be enforceable
-» exemplifies that contract law is looking for agreement and not ‘fair or best bargains’

Question 21

3 rules for consideration to be sufficient in law

Answer 21

• real
• tangible
• valuable

Question 22

Chappell & Co v Nestlé Ltd

Answer 22

• offering a record for sale at 1s 6d plus 3 wrappers from its chocolate bars
• record usually sold at 6s 8d
• permission to use copyright was not obtained
• Chappell sued to prevent the promotion, since they would receive a much lower loyalty from it

Question 23

Chappell & Co v Nestlé Ltd: legal principle

Answer 23

• wrappers held to be part of the consideration, even though they were thrown away when received
  Lord Somervell -»
• a contracting party can stipulate for what consideration he chooses

Question 24

performance of an existing duty

Answer 24

• if a party is performing a duty that they are already bound to do, then this is not sufficient to amount to consideration for a new agreement

Question 25

Stilk v Myrick 1809

Answer 25

• 11 sailors; agreed to crew a ship from London to Baltic and back
  -> 2 sailors deserted in the Baltic, remaining 9 refused to work + pressed for higher wages
  -> agreed at time, but ultimately refused to pay; sailors sued captain

Question 26

Stilk v Myrick 1809: Legal Principle

Answer 26

• the promise to pay was unenforceable since the sailors were already contractually bound to return the ship to London
• therefore no consideration given by the sailors in return for the captains promise to pay for additional wages

Question 27

Stilk v Myrick 1809: analysis

Answer 27

• as consideration is defined in terms of a detriment, seems logical that you cannot suffer any detriment in relation to a new promise, if that detriment is something that you were going to have to do anyway

Question 28

basic rule in relation to performance of an existing duty

Answer 28

it is not good consideration for a new promise

Question 29

basic rule exception

Answer 29

• where a public duty is exceeded
• where a contractual duty is exceeded
• where there is an existing contractual duty owed to a third party
• where the rule in Williams v Roffey applies

Question 29

where a public duty is exceeded

Answer 29

Glasbrook Bros v Glamorgan County Council 1925

Question 30

Glasbrook Bros v Glamorgan County Council 1925

Answer 30

• miners strike
• owner of a pit asked police to pay for extra protection and promised to pay for it
• after strike; pit owner refused to pay, claiming police were already bound by public duty to protect the pit
  -> promise to pay was enforceable, since police had done more than they usually would’ve done
  -> this was good consideration for the pit owners promise to pay
  -» if one party ends up giving more than they would otherwise have done, then this additional detriment represents sufficient consideration to render enforceable a promise given in return for it

Question 31

where a contractual duty is exceeded

Answer 31

Hartley v Ponsonby 1857

Question 32

Hartley v Ponsonby 1857

Answer 32

• involved sailors deserting a ship
• the captain had promised to pay the remaining sailors additional wages for crewing his ship back home
• 19/36 remained;
  -> promise to pay was enforceable, court considered the greater proportional reduction in crew members made the return for voyage more dangerous because the ship was shorthand
• the sailors promise to return under more dangerous conditions had exceeded their existing contractual obligation -> therefore this represents good consideration for the promise of extra pay

Question 33

where there is an existing contractual duty owed to a third party

Answer 33

Scotson v Pegg 1861

Question 34

Scotson v Pegg 1861: FACTS

Answer 34

• Scotson contracted to deliver coal to X
• X sold coal to Pegg, and ordered Scotson to deliver the coal to Pegg
• P promised S he would unload it at a daily fixed rate
• P did not fulfil this promise, S attempted to enforce Ps promise
• P argued that the promise was not binding because Scotson had not provided consideration; as Scotson was bound by his contract with X to deliver the coal

Question 35

Scotson v Pegg 1861: Legal Principle

Answer 35

• held the delivery of the coal to P was good consideration to enforce Ps promise to pay

Question 36

where rule of Williams v Roffey applies

Answer 36

in one note

Question 37

part payment of debt

Answer 37

Foakes v Beer

Question 38

Foakes v Beer

Answer 38

• Foakes owed Beer £2,090
• agreed Foakes could pay in instalments
• Beer agreed that no further action would be taken if the debt was paid by the agreed date
• later Beer demanded an additional interest payment
• Foakes refused to pay
• Beer succeeded in the claim for interest payment

Question 39

Foakes v Beer: analysis

Answer 39

• the harshness of this common law that led to the developed of the equitable doctrine of promissory estoppel