consideration 2 Flashcards
Dunlop v Selfridge
consideration was defined in terms of the price by which one party bought the other party’s act or promise.
what is executory consideration?
- binding contract is formed through the exchange of promises.
- promise to perform an action at some point in the future.
E.g., John promises to deliver a car to Bert and Bert promises to pay John £10,000 for the car on delivery.
If John fails to deliver the car he is in breach of contract.
what is executed consideration?
- A contractual obligation to pay arises when one party has performed their consideration.
- The offeror promises something in return for the offeree doing something, the promise only becomes enforceable when the offeree has performed the act.
what are the 4 rules relating to consideration?
- Consideration must not be past
- Consideration must move from the promisee
- Consideration must be sufficient but need not be adequate
- Rule in Pinnel’s Case
- consideration must not be past
- In short this means that any act must not come before any promise (e.g., of payment).
If a promise is made after an act has been completed, it is called past consideration and not usually enforceable.
Re Mcardle 1951
In this case, Mr. McArdle left his house to his wife and then to their four children after her passing. During Mrs. McArdle’s life, one son and his wife moved into the house and the daughter-in-law made home improvements costing £488. After the improvements were finished, all children signed an agreement to reimburse her when Mrs. McArdle died. However, upon Mrs. McArdle’s death, the children refused to honor the agreement. The court held that since the improvements were completed before the agreement to pay £488 was made, they were considered past consideration, rendering the agreement legally unenforceable.
Had the work been carried out in response to a promise of reimbursement, the daughter-in-law would have been entitled to payment according to the court.
