Consideration

Question 1

Currie v Misa

Answer 1

Consideration is some benefit accruing to the promisor or some detriment being sustained by the promisee

Question 2

Hamson

Answer 2

Consideration is part of the “indivisible trinity” with offer and acceptance

Question 3

Prof Atiyah

Answer 3

Consideration is effectively a disguise for judicial discretion as to whether there is “good reason” for giving an agreement legal effect

Question 4

White v Bluett/ Lipkin Gorman v Karpnale

Answer 4

Support Prof Atiyah’s analysis: appears to be consideration but the courts have refused to accept it (a) promise not to complain; (b) gambling chips not consideration b/c court wished to claim the trust money

Question 5

Thomas v Thomas

Answer 5

Consideration must be sufficient but need not be adequate (“anything of value in the eye of the law”)

Question 6

Chappell v Nestle

Answer 6

Consideration need not be of economic value: “a peppercorn does not cease to be good consideration if it is established that the promisee does not like pepper and will throw away the corn (per L Somervelle: supports JC Smith contra Treitel)

Question 7

Cook v Wright

Answer 7

Being spared the trouble and expense of legal proceedings can be good consideration, even if the defendant would have certainly won

Question 8

Cook v Wright

Answer 8

(a) policy grounds: encouraging people to uphold agreements to compromise; (b) a case cannot be called worthless until it is tried

Question 9

Cook v Wright

Answer 9

Consideration need not be a thing to be ‘of value’

Question 10

Wade v Simeon

Answer 10

If the claimant knows they have no claim, they have sustained no detriment so there is no consideration

Question 11

Combe v Combe

Answer 11

Consideration must be requested (cf. Shadwell v Shadwell)

Question 12

Dickinson v Abel

Answer 12

Where a gift is contingent on a condition which moves from the promisee, then that is consideration; if not, then the promise is a gift

Question 13

Roscora v Thomas

Answer 13

Consideration cannot be given prior to the giving of the promise (consideration must not be past)

Question 14

Lampleigh v Braithwaite

Answer 14

Doctrine of implied assumpsit: if the offeror has previously requested something of the offeree and subsequently offers consideration, it will be fictionally attached to the previous request to make it contractually binding

Question 15

Pao On v Lau Yiu Long

Answer 15

It must be the case that if the promise had been given at the ‘correct’ time, the act would have amounted to consideration (i.e. not illegal, etc)

Question 16

Ward v Byham

Answer 16

A promise of performance of a pre-existing duty under general law can amount to consideration (cf. Collins v Godfrey - never - and Glasbrook v Glamorgan - only where the promisee goes above and beyond the call of duty)

Question 17

Scottson v Pegg

Answer 17

A promise of performance of a pre-existing duty under contract with a third party may amount to consideration (ability to breach the original contract is valuable)

Question 18

The Eurymedon

Answer 18

In a commercial context, all things are done because of some kind of bargain, so consideration can be found in a broad sense (per Lord Wilberforce)

Question 19

Stilk v Myrick

Answer 19

A promise of performance of a pre-existing duty under contract does not normally amount to consideration: on grounds of preventing duress (Harris v Watson) or because they have given nothing of value (Stilk v Myrick)

Question 20

Hartley v Ponsonby

Answer 20

No application of the rule in Stilk where a promise is given for duties that are substantially different from the original contract

Question 21

Williams v Roffey

Answer 21

No application of the rule in Stilk where a promise confers a practical advantage on the promisor (getting building work completed in time)

Question 22

Selectmove

Answer 22

The ratio of Williams v Roffey applies only to goods and services not part payment of a debt

Question 23

Coote

Answer 23

Suggests that Roffey could abolish the need for consideration to support the variation of contracts

Question 24

Pinnel’s Case

Answer 24

Part payment of a debt is not capable of being consideration, even if the agreement makes it clear that the creditor receives it as such

Question 25

Pinnel’s Case

Answer 25

Receipt of something else other than debt (horse, hawk or robe) will be satisfaction because the law presumes this was more valuable to the creditor - or else why would he have accepted it?

Question 26

Pinnel’s Case: Policy

Answer 26

(a) Part payment means the creditor is receiving nothing new and therefore no consideration; (b) provision of something new indicates a new agreement to terminate the original debt (c) Pinnel’s case more precisely concerned a penal bond with a conditional defeasance; part payment does not discharge the condition

Question 27

Foakes v Beer

Answer 27

Upheld Pinnel’s Case on ground (a). L Blackburn in dissent: part payment may indeed be more valuable, especially where the debtor may be insolvent and therefore unlikely to pay in full

Question 28

Evasion of the rule in Pinnel’s Case

Answer 28

(a) Where part payment is requested and accepted before the due date (more valuable than full payment): Pinnel’s Case; (b) part payment requested and accepted at a place other than the one originally fixed for payment and which is more beneficial for the creditor: St Edmunds Properties; (c) part payment is made to the creditor by someone other than the debtor on the basis that this is a new accord releasing the debtor - although this is unconvincing and may not even be true: Hirachand v Temple