Consideration

Question 1

What is the definition of ‘consideration’?

Answer 1

The three Ps according to Pollock - “the Price one Pays for another’s Promise”
Consideration is reciprocity and without it a contract is unenforceable.

Question 2

Which case states that considerate need not be adequate, but must be sufficient?

Answer 2

Chappell v Nestle

Question 3

Which case states that consideration must have some economic value?

Answer 3

Thomas v Thomas

Question 4

Which case states that forbearance is generally not good consideration?

Answer 4

White v Bluett, due to public policy issues

Question 5

Which case suggest that giving up ones’s legal rights (and so a type of forbearance) is good consideration?

Answer 5

Hamer v Sidway, US case

Question 6

Is past consideration good consideration?

Answer 6

Generally no, Roscarla v Thomas

Question 7

What is the exception to the rule set in Roscarla v Thomas?

Answer 7

Past consideration may be good consideration if all the following 3 conditions are satisfied:

1) the act was carried out at promisor’s request (Lampleigh v Brathwait)
2) the parties understood from th ebeginning that the act was to be rewarded in some way (Re Casey’s Patents), and;
3) all other requirements for a valid, binding contract exist.

Question 8

Is A’s performance of his existing contractual duties good consideration in exchange for a promise from b to pay more?

Answer 8

Generally no, Stilk v Myrick

Question 9

If A exceeds his duties in some way or confers extra benefit on B will the rule set by Stilk v Myrick apply?

Answer 9

No (Hartley v Ponsonby) but it is a question of fact and public policy.

Question 10

What are ‘The Glidewell Principles’?

Answer 10

a) There is a contract for goods/services in return for payment;
b) B doubts whether A will complete his obligations;
c) B promises additional payment if A completes his obligations on time;
d) as a result of giving this promis, B obtains a practical benefit or obviates a disbenefit; and
e) B’s promise to pay extra is not given as a result of economic duress or fraud on the part of A

Question 11

If ‘The Glidewll Principles’ are satisfied will the rule set by Stilk v Myrick apply?

Answer 11

No, Williams v Roffey Bros

Question 12

is A’s performance of his existing contractual duties to a third party good consideration?

Answer 12

According to Scotson v Pegg - yes, a promis to do something can amount to consideration even if the promisor is already bound to perform this obligation for another party

Question 13

Is the performance of one’s public/legal duties good consideration?

Answer 13

Generally no, Collins v Godefroy

Question 14

Which case states that the rule set in Collins v Godefroy will not apply if performance is not contrary to public policy?

Answer 14

Williams v Williams

Question 15

Which case states that the rule set in Collins v Godefroy will not apply if performance exceeded public duty?

Answer 15

Glasbrook Bros

Question 16

Is the part payment of undisputed debts good consideration for a promise by the creditor to forgo the balance?

Answer 16

Generally no, Foakes v Beer

Question 17

Which case states that part payment is good consideration if the debtor gives something different, or pays early?

Answer 17

Pinnel’s case

Question 18

What is the definition of promissory estoppel?

Answer 18

According to High Trees House it is where a promisor has, by words or conduct, made a promise to the other party (the promisee) to forgo a legal right, once the promisee has acted on this promise he will have a good defence to any claim brought by the promisor which is inconsistent with the promise.

Question 19

When will promissory estoppel apply?

Answer 19

If all the following conditions are fulfilled [PRIDE]:
Promise - to waive a legal right
Reliance - promisee must act upon the promise reliably
Inequitable - for promisor to go back on his promise
Defence - no action risen
Effect - is to extinguish or suspend legal rights

Question 20

Which case states there must be a promise to waive legal right, which must be intended to be acted upon by the other party for promissory estoppel to apply?

Answer 20

Hughes v Met

Question 21

Which cases states the promisee need not have acted to his detriment but only have altered his behaviour for promissory estoppel to apply?

Answer 21

Ajayi v RT Briscoe and Alan v El Nasr

Question 22

Which case states it must be unjust/inequitable for the promisor to go back on his promise and insist on his full legal rights?

Answer 22

D&C Builders v Rees

Question 23

Which case states the promissory is a shield not a sword, and so does not give rise to a cause of action?

Answer 23

Combe v Combe

Question 24

What is the effect of promissory estoppels?

Answer 24

Usually operates to suspend promisor’s legal rights.

Question 25

Which case states that the promisor may resume rights after promissory estoppel by giving promisee reasonable notice?

Answer 25

Tool Metal v Tungsten

Question 26

What is the effect of promissory estoppel in cases where promisee cannot resume his original positon?

Answer 26

May operate to permanently extinguish promisor’s legal rights - Ajayi v RT Briscoe

Question 27

What is the effect of promissory estoppel on one-off debts?

Answer 27

Uncertain, may operate to waive payment - D&C Builders

Question 28

What is the definition of agency?

Answer 28

it is the relationship that arises where one person (agent) acts on behalf of another (principle) and has the power to effect the principal’s legal position with regard to a third party

Question 29

How is agency created?

Answer 29

According to Freeman and Lockyer v Buckhurst Park Properties in one of two ways:

1) Actual authority; or
2) Apparent authority

Question 30

What is the definition of ‘actual authority’?

Answer 30

legal relationship between principal and agent created by express appointment

Question 31

What is the definition of ‘apparent authority’?

Answer 31

legal relationship created between the principal and third party when: a representation (words or conduct) is made by the principal to the third party that the agent had authority; the representation is relied upon by the third party, believing that the agent had authority; and in reliance of the representation, the third party altered their position (by entering the contract)

Question 32

What happens when an agent has no authority?

Answer 32

the principal cannot sue or be sued by the third party.
The third party may sue the agent in tort of deceit, in the agent knew he had no authority; or breach of an implied warranty of authority.

Question 33

What happens if an agent exceeds his authority?

Answer 33

There is no authority