Consideration Flashcards
Consideration
‘the price of the promise’ distinguishes between an enforceable contract and an unenforceable contract.
Pullock defines consideration as
‘an act of forbearance of one party, or the promise thereof, is the price for which the promise is bought’. Therefore, consideration exists where parties exchange promises of value.
Tweddle v Atkinson
consideration must move from the promisee
McDonnell v Ring
“consideration need not be adequate, but must be sufficient and can never be past”
Stilk v Myrick
A sailor sued on the promise by his employer to pay extra wages as the workload of the crew increased mid-way through the voyage following the desertion of other crewmen. P’s claim was rejected by the court on the basis that he has provided no consideration for the promise. It was already part of his duties to meet the normal difficulties which may arise during the voyage.
Past consideration
Consideration offered for something which was already done and is not valid consideration
Eastwood
while an agreement might give rise to a moral obligation, that alone is not enough.
Roscorla v Thomas
Past consideration is no consideration at all. Here, after a sale of a horse had occurred, the vendor said the horse was free from vice. However, it turned out that the horse had vice and the purchaser sought to sue for breach of contract. It was held this was not enforceable as it was past consideration and therefore did not form part of the contract and so was unenforceable.
Re McArdle
A woman had carried out several renovations to the property and after completing them her relatives agreed to pay her. However, they later refused to pay this sum. The court held that past consideration is no consideration, and that as the agreement took place after the consideration (after the renovations were complete), it was not a binding and legally enforceable agreement.
Law Society of Ireland v O’Malley
O’Malley had been in an accident leaving him with severe physical injuries. He was looked after with gifts from his wifes family and told the insurers to pay the family the money from the accident. It was held this was not possible as the past consideration was no consideration for that contract.
Lampleigh v Braithwaite
Exception to rule of past consideration. It was implied there would be payment for the plaintiffs trip to London for the defendant. This was reaffirmed in Bradford v Roulston.
Pao On v Lau You Long Lord Scarmna set out the conditions:
- Act is done at promisors request
- Parties understood the act was to be paid for
- Legally enforceable if promised in advance
Adequate consideration
Need not be sufficient but must be adequate
Haigh v Brooks
An extortionate amount of money was paid for a seemingly worthless piece of paper. The court held that consideration need not be sufficient, but it must be adequate.
Thomas v Thomas
It was held that 1 pound paid for rent was adequate consideration as it had some value.
Chappel v Nestle
The return of sweet wrappers, seemingly worthless, in exchange for a record was considered to be adequate consideration as the wrapper had some value to Nestle.
Act of forbearance
Refraining from asserting a legal right is a valid form of consideration
Hamer v Sidway
an uncle offered to pay his nephew if he went to university and abstained from drinking, smoking and focused on his exams and passed. The nephew did that, and returned to his uncle after university expecting payment. The court held that forbearance, or compromise on behalf of the promisee, was good consideration.
Jones v Padvaton
a mother wished for her daughter to become a barrister and offered her a monthly allowance and a house to live in. when the relationship broke down the court held the agreement was not intended to create legal relations as it was imprecise, of undefined duration and not in writing, and was therefore just a family arrangement.
Haggar v De Placido
a written agreement was intended to create legal relations and was therefore legally binding.
McGillicuddy v Joy
the p refraining from bidding at a public auction constituted ‘plenty of consideration’.
Cook
it was found that not pursuing legal proceedings which one had a right to pursue was also sufficient consideration.
Rule in Pinnels Case
This rule states that a debt is unenforceable unless supported by fresh consideration. It states offering part payment in full satisfaction of a debt is not enforceable as there is no consideration from the other party. the exception to this is if something else besides money was offered or if the part payment was offered before the full debt was due. The rule in Pinnell v Pinnell was approved in Ireland in Permanent TSB v Walsh.
D&C Builders v Rees
the plaintiff builders were owed 480 by the defendants. The defendants knew that the plaintiffs were in dire financial difficulty and therefore offered the builders 300 pounds in full satisfaction. The builders reluctantly accepted the 300 pounds but then sued for the rest. The court ruled in favour of the builders.
Foakes v Beer
Dr Foakes owed mrs beer 2090 plus interest. A subsequent agreement to pay 500 and the remainder in instalments was deemed not to be enforceable as payment of part of the debt was not good consideration for an agreement to forgo the whole debt.
