Consideration Flashcards
define consideration
‘price for which something is bought’
what must each party do for consideration to be present?
each party must ‘give something’ or promise to give something of value
does consideration have to be present for a valid contract/
yes
what are the 6 rules of consideration?
- sufficient
- past consideration
- move from the promisee
- existing duty
- pre-existing debt
- duty imposed by law
what is the 1st rule of consideration?
what is the 1st rule of consideration
consideration need not be adequate but it must be sufficient
who is it up to to decide if consideration is adequate
parties
in what case was the consideration adequate
Thomas v Thomas
in what case was the consideration sufficient
Chappell v Nestle
what did Chappell v Nestle say about sufficient
it’s a legal term - what’s punished must be real, tangible + have some actual value
what is past consideration
something already done at the time the agreement is made
what is the 2nd rule of consideration
past consideration is not good consideration
what case said that where the consideration is past there will not be a valid contract
Re McArdle
in what case was it shown that where A requests some performance from B before a contract comes into existence, on common understanding that there will be a contract + that there will be a payment - valid consideration
Lampleigh v Braithwaite
what is the 3rd rule of consideration
consideration must move from the promisee
in what case did the husband’s claim fail because he had given no consideration
Tweddle v Atkinson
what is the 4th rule of consideration
performance of an existing contractual duty cannot be consideration for a new contract
what case states that merely doing something you are already bound to do can never amount to consideration
STILK v Myrick
what case states that it will be consideration if D done more than was identified in the contract
Hartley v Ponsonby
what case states that there will also be an exception is party making promise to pay extra receives an extra benefit
Williams v Roffey Bros
what is the 5th rule of consideration
a promise to accept part payment of a pre-existing debt in place of the whole debt is not consideration
what case does the 5th rule of consideration come from + explain
Pinnel’s case 1602 - a creditor can claim remainder of a debt even if creditor has agreed with debtor that a part payment of the debt will clear it
what 2 cases can the rule from Pinnel’s case be seen in
Foakes v Beer
D&C Builders & Rees
what did the law appreciate about Pinnel’s rule - and what was developed
that it was harsh - developed 3 exceptions
what are the 3 exceptions to Pinnel’s case
- debtor agrees to pay smaller amount on earlier date than originally agreed, then debtor has provided consideration for the new agreement
- if x owes money to y, and z agrees to pay part of sum on behalf of x in full + final settlement, y cannot sue x for balance
- the doctrine of PROMISSORY ESTOPPEL
as in the 1st exception of pinnel’s case (debtor agrees to pay smaller amount on earlier date than originally agreed, then debtor has provided consideration for the new agreement) if the debtor agrees to accept something other than money for the whole debt, is this good consideration? explain even if…
yes - even if item not comparable in value to the debt as long as it is adequate
what case does the 2nd exception of Pinnel’s rule (if x owes money to y, and z agrees to pay part of sum on behalf of x in full + final settlement, y cannot sue x for balance) come from?
Hirchand punamchand v Temple
explain the 3rd eception to Pinnel’s case (the doctrine of promissory estoppel) + case
Central London Property Trust v High Street House: if 1 party to an existing contract (promisor) promises t vary contract for others benefit + the other relies on that promise to vary, promisor cannot go back on that promisor
what case states that a person can only rely on promissory estoppel if he acted moerally
D&C Builders v Rees
in what case did the court ignore promissory estoppel + held
Selectmore - held that Inland revenue could claim the whole debt
what is the 6th rule of consideration + case
A promise to perform a duty which the law already demands be carried out is not sufficient consideration - Collins v Godefroy
what case states that if a person goes beyond his legal duty then he can enforce the promise
Glasbrook Bros v Glamorgan County Council
