Consideration

Question 1

The orthodox view for consideration

Answer 1

Reciprocity. To be entitled to enforce a promise, a promise must give something in return for the promise. This distinguishes a bargain and a promise to gift.

Question 2

Five criticisms of consideration

Answer 2

1. Too narrow in scope, doesn’t give legal effect to promises that deserve it
2. Technical doctrine
3. Divorced from commercial reality, although Lawyers can simply Ensure that consideration is provided for in contracts nowadays
4. Doctrine of consideration is difficult to reconcile with modern theoretical models of contract law
5. Over broad, work done for the doctrine could be done more effectively for other doctrines

Question 3

What is Mindy Chen’s reciprocity reason for consideration? (5 points)

Answer 3

1. Recognises and expresses human instinct for reciprocity
2. Enhances cooperation and division of labor
3. Preserves social equilibrium
4. Represents terms of engagement between equals who are deserving of respect
5. Keeps the state away from the private domain, to distinguish between a contract and gift-giving!

Question 4

Definition of consideration

Answer 4

Consideration is to be of value in the legal sense, and may consist either in some right, interest or benefit accruing to one party; some forbearance, detriment or loss undertaken by the other. The promisee gives value to the promisor to receive value to be entitled to the promise.
Consideration is for a promise, not a contract

Question 5

Three principal rules of consideration (+ 1 more actually)

Answer 5

1. Consideration must be sufficient, need not be adequate
2. Past consideration is not good consideration
3. Consideration must move from the promisee
   (4. Pre-existing duty)

Question 6

Chappell & Co Ltd v The Nestle Co Ltd [1960] AC 87, HL

Answer 6

The court found that chocolate bar wrappers were sufficient consideration as part of the defendant’s promise to deliver a record, where they were of value to the defendants.

Suggests that consideration may be sufficient insofar as the defendant had an objectively good reason (i.e. commercial sales) for requesting for such consideration, and the courts recognised it as valuable in the eyes of the law

Question 7

Bainbridge v Firestone (1838) 8 A & E 743

Answer 7

Courts found that the plaintiff’s consent to lend his boilers to the defendant was sufficient consideration for the defendant’s promise to restore the boilers after borrowing (and weighing them).

B’s detriment by lending boilers. F’s benefit by obtaining permission.

Shows that courts are quite benevolent in defining “valuable” consideration depending on the factual matrix of the case, and what the parties believed to be of value at the point of contracting

Question 8

Pitt v PHH Asset Management Ltd [1994] 1 WLR 327

Answer 8

Courts found that the plaintiff provided consideration by withdrawing his threat, refraining from causing trouble, and to limit himself to two-weeks to exchange contracts with the defendant. (Facts: P wanted to buy property from PHH. PHH was going to sell to another person who bid higher, then P threatened and negotiated, which PHH agreed to. PHH still sold the property to the other person - issue is whether P provided valid consideration)

P’s threat lacked substance (not legally actionable), but withdrawing the threat was sufficient consideration as he ACTED IN GOOD FAITH, DID NOT KNOW INVALIDITY OF HIS CLAIM —> And PHH benefitted by being free of such threats and nuisance!

Question 9

Cook v Wright (1861) 1 B & S 559

Answer 9

The court found that valid consideration was provided by C to W to withhold any legal action against him, in exchange for W’s promise to pay for costs of public works that W was not liable for.

C had suffered detriment insofar as the compromise induced them not to take legal proceedings against W, even though it would not be actionable. C benefitted by avoiding the expense and trouble of legal proceedings.

Question 10

Wade v Simeon (1846) 2 CB 548

Answer 10

The court found that there was no consideration to support S’s promise to pay the sum claimed by W. W knew that his threat of legal action was invalid, and his promise to withhold legal action was therefore insufficient consideration (no detriment suffered by him).

Question 11

Pitt v PHH, Cook v Wright, Wade v Simeon - What is the point to draw from this?

Answer 11

GIVING UP A CLAIM (made in good faith) IS GOOD CONSIDERATION

1. All contained threats that had no legal basis. For Pitt & Cook, they constituted sufficient consideration insofar as Plaintiffs had withheld their threats that they made in good faith. The plaintiff in Wade knew he had no claim, and suffered no detriment in promising to withhold legal action.
2. This shows that the courts prioritise the knowledge of the plaintiff, allowing consideration to be valued based on the knowledge of the plaintiff. There is a recognition that between laymen, it may be unreasonable to expect all negotiations and bargains to be 100% legally accurate. At the same time, they want to avoid threats to resort to legal action in pursuit of a claim that is knowingly invalid!

Question 12

How does White v Bluett (1853) contradict Pitt, Wade and Cook? Can the NY case of Hamer v Sidway (1891) explain anything about the contradiction?

Answer 12

In White, the court found that the defendant’s (Son) promise to stop complaining of his father’s intention to distribute his estate” in return for his father’s promise to release him from liability was not valid consideration as he had no right to complain in the first place.
This case may be problematic because (1) domestic sphere - is there the intention to create legal relations (2) this case was decided mostly on the basis of consideration - so why wasn’t this proper consideration? Son had a right to complain, but no right to insist on distribution of estate.
ARGUED that the courts were then unwilling to find consideration in the domestic sphere, and blend legal relations with domestic relations (although there were proper legal relations between Father and Son insofar as there was liability to repay debt).

The case of Hamer v Sidway shows the courts willingness to find consideration in the domestic context (although NY, we may reasonably conclude that English court would follow), where the court found that the Nephew provided valuable consideration by giving up his right to indulge in vices for his uncle’s promise of $5000. Uncle could have said to benefitted in the legal sense.

Question 13

As a wrap-up to CONSIDERATION MUST BE SUFFICIENT, what are some concluding thoughts?

Answer 13

1. Benefit and detriment has no substantial meaning in the legal sense: they are not defined in the economic sense, and the benefit/detriment need not be “adequate” in The Eye of the law. The consideration is sufficient insofar as the defendant asks for something in return for his promise, and if he gets what he asked for, then there is consideration (unless vitiating factors are present)
2. Would it be right to look at Hamer v Sidway from the perspective of consideration? Atiyah thinks that the uncle’s promise is gratuitous promise, and should not be enforceable based on the “benefit gained, therefore consideration”, otherwise a lot of gratuitous promises will be enforceable on this basis —> The law intrudes on the private domain. Likewise, the Nephew is usually viewed to have suffered detriment, but this can be viewed just from the perspective of a unilateral contract where the courts ought to enforce promises that had induced actions in reliance.
3. Consideration per se may not be an essential doctrine, other aspects of contract may be able to substitute the role that consideration has played with the same legal outcomes?

Question 14

What are the categories of Pre-existing duty owed?

Answer 14

(A) Performance of duty owed to third party
(B) Performance of duty owed to promisor
(C) Performance of duty imposed by law

Question 15

What are some A+ questions you should think about for Pre-existing duty?

Answer 15

1. Is there justification for differentiating between the three categories? Why is there consideration for the performance of PED to third party, but not PED to promisor or imposed by law?
2. Refusal to recognise consideration may be to protect promisor from duress by party promising to perform PED. Why is consideration the means to protect such behaviour? Why not other legal development that can target such behaviour?
3. What is the conception of benefit and detriment? Legal B&D? Or Practical B&D (as used in Williams v Roffey Bros)
4. How about contract formation and modification? Does the law distinguish that? How does the doctrine of consideration apply in both contexts.. why is it applied in both contexts, and should consideration be applied less stringently for contract modification, if not removed altogether?

Question 16

General rule for performance of PED to third party

Answer 16

Performance of, (and even a promise to perform,) a pre-existing contractual duty owed to third party constitutes consideration for a promise given by another party.

Question 17

Shadwell v Shadwell (1860) 9 CB (NS) 159 (what was the rationale)

Answer 17

Court found that the Nephew provided consideration by performance his PED to marry his Wife, for his uncle’s promise to provide allowance for a period of time.

The reason being that while the Nephew benefits by marrying a woman of his choice, it may also be a loss where he was induced by the uncle’s promise to marry at that point in time, despite all other circumstances, and the uncle’s promise was in legal effect, a request for them to marry, and to provide allowance as a “reward”.

Side Note: Rather than view this as a consideration case, can it be viewed as a unilateral contract? Gratuitous promise… domestic sphere.

Question 18

New Zealand Shipping Co Ltd v AM Satterthwaite & Co Ltd (The Eurymedon) [1975] AC 154

Answer 18

The Council held that the performance of the stevedores’ performance of their contractual duty to unload the goods, which was a PED to a third party - carrier, was good consideration for the shipper’s offer not to sue them for any damage done.

Amounts to valid consideration!

Question 19

Pau On v Lau Yiu Long [1980] AC 614

Answer 19

Court held that a promise to perform a PED to a third party is valid consideration (even though Jones v Waite (1839) took the opposing view)

Question 20

Summary of PED owed to third party, what are the cases?

Answer 20

Shadwell v Shadwell
The Eurymedon
Pau On v Lau Yiu Long

Shadwell may prove to be the most controversial case imo, unsatisfactory reasoning

Question 21

PED imposed by the law - general rule? Any exceptions?

Answer 21

Traditional rule is that performance of PED imposed by law, or the promise to perform such a duty, does not amount to valid consideration.
However, other cases (Ward v Byham, Williams v Williams, Glasbrook Brothers Ltd v Glamorgan County Council) have ruled otherwise.

Question 22

What case supports traditional rule?

Answer 22

Collins v Godefroy (1831) 1 B & Ad 950.

Court found that the attorney did not provide consideration for a promise of payment for his attendance as a witness in court, as that was a duty imposed on him by subpoena.

Question 23

Ward v Byham [1956] 1 WLR 496 CA (Lord Denning). Anything problematic?

Answer 23

Court of Appeal held that the Mother had provided consideration by taking care of the child BEYOND her legally prescribed duty, for the father’s promise of providing allowance.

She was legally bound to take care of the child, but the father received a benefit to have the child looked after. It is a unilateral contract (Denning) and the Mother is entitled to the reward (besides he had paid the neighbour the same). The Mother also promised to raise the child up happy, and let her choose who she’d like to live with in the future.

Problematic because “love and affection” was regarded as consideration… domestic sphere. Furthermore, it’s hard to tell whether one is doing more than what one is legally obliged to do.

Question 24

What is Lord Denning’s second assault on the traditional rule (PED imposed by law)?

Answer 24

Williams v Williams [1957] 1 WLR 148 CA

Denning said that the deserter Wife provided valid consideration for the husband’s promise of providing maintenance, by promising to maintain herself and indemnify the Husband of all debts incurred by her, and not pledge his credit, even though this was her PED. The Husband benefitted by being freed of all trouble and having assurance of her promised performance.

Question 25

Glasbrook Brothers Ltd v Glamorgan County Council [1925] AC 270

Answer 25

Court held (bare majority) that the police had provided consideration as they had provided a special duty (beyond their duty imposed by law) to the plaintiff’s promise for payment. Their garrison was an additional means of protection.

But the dissenting judges felt that “special services” was difficult to work out, and may amount to instances where parties may claim that they’re doing more than their duty and make unreasonable demands (duress) and also for public policy reasons.

Question 26

Thoughts about these cases

Answer 26

Ward v Byham presents problematic situation whereby it interferes with domestic sphere, and there ought to be public policy requirements that the law shouldn’t give effect to private bargains between parents in relation to their obligations in respect of the care of their children.
Similarly, there are public policy concerns for Glasbrook, and allowing “additional services” to be valid consideration is hard to define, a grey area, that allows for unreasonable and unlawful exploitation.

Question 27

Performance of PED owed to promisor - general rule. Relevant cases?

Answer 27

Vexed question! Traditionally, a person has not provided valid consideration for a promise to do what is already is PED to the promisor.
Traditional cases: Stilk v Myrick; Foakes v Beer
Challenger cases: Williams v Roffey Bros & Nicholls (Contractors) Ltd

Question 28

The traditional case with two reports:

Answer 28

Stilk v Myrick (1809) 2 Camp. 317, 6 Esp 129

Espinasse (6 Esp 129): The court ruled BASED ON POLICY that the seamen had a pre-existing duty to the master of the vessel to sail the ship on a return trip, and that despite desertion or other unfortunate events, they were not entitled to the master’s promise for extra renumeration, for fear of duress.

Campbell (2 Camp 318): The court ruled BASED ON CONSIDERATION that the seamen did not provide any consideration in exchange for the master’s promise, as it was already their prior contractual obligation to sail the ship back regardless of the circumstances.

Question 29

What is wrong with Espinasse’s report? Doctrinally and factually:

Answer 29

1. The doctrine of duress was undeveloped in 1809 where economic application was concerned, doubts whether it even existed at the time
2. Factually, duress should not have been a concern as the master made such promise when the ship was at port, and was unlikely to have been pressure on the master at the point. However, it could’ve been true to the extent that the cited Harris v Watson was to prevent duress as the ship concerned then was in a time of danger, requiring an inducement of pay, and was ruled for reasons of public policy

Question 30

Analysis of Campbell’s?

Answer 30

1. Why is it that the seamen working harder was not considered consideration on their part? It was to their detriment, and to the master’s benefit as a result of their work.
2. Lord Ellenborough examined detriment and benefit from a legal perspective, where the seamen did not suffer any legal detriment, neither did the master gain any legal benefit - both were set in their contract. Only an issue when we consider ‘practical benefit/detriment’ in modern terms.

Question 31

Contrast between Campbell’s report of “no consideration” vs doing more than your PED imposed by law? What are two cases that apply the principle consistently?

Answer 31

Where there is the performance of a PED imposed by law, courts recognise that parties doing more than their legal duty provide valid consideration - Glasbrook Brothers; Ward v Byham - but even such principle has been applied to PED to promisor, such as in:

Hartley v Ponsonby (1857) for sailors who did more than they did because of deserters, and they were entitled to refuse to continue;

OR Hanson v Royden (1867) where plaintiff did more than his obligation for the promise of extra pay.

Question 32

Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991] 1 QB 1, CA; Just the facts and holding, analysis will come at a later flash card

Answer 32

The court found that Williams (carpenter) had provided sufficient consideration for Roffey Bros’ promise for additional payment, given that Roffey Bros received practical benefit through the assurance of Williams being able to continue with their contractual obligation. There need not be a detriment suffered, and consideration is sufficient insofar as both sides have also received some kind of benefit from one another. Stilk v Myrick was validated, but said to be too narrow in application, and distinguished based on different social circumstances

Question 33

What are some points to analyse Williams v Roffey Bros

Answer 33

1. Practical benefit was recognised by Purchas L.J. in that Williams did not break the contract, yet this is necessarily controversial because in the legal sphere, W has no right to break the contract, and RB has legal entitlement to the fulfilment of the contract - practical benefit admittedly does not belong to the legal discussion!
   1a. It is therefore difficult to establish permissibility in recognising practical benefit. Glidewell L.J. recognised practical benefit to the Father in WvB. But in Glasbrook v Glamorgan, do statutory bodies not also provide practical benefit to all they serve as part of their legal duty? Why can’t they impose payment?
2. Therefore, recognising practical benefit certainly poses problems. The learned judges distinguished WvRB from Stilk v Myrick due to social circumstances and policy considerations, that perhaps explains why practical benefit was not recognised.
   2a. It’s worth considering how Espinasse’s account of duress was the one implied by the judges in WvRB, even though they cited Campbell’s.
   2b. SvM’s analysis can be viewed as practical benefit and consideration being negated by policy considerations
   2c. However, it is traditionally argued that no consideration was provided in the first place in SvM, that is, consideration in the legal sense.
3. Prof Coote argues that WvRB should not have acknowledged “practical consideration”, and instead decide that consideration is unnecessary for contract variation
   3a. SvM can then be interpreted as having “ought to be enforced, in the absence of negative policy reasons”
   3b. This is a view taken up by Canada’s New Brunswick CA in Nav Canada v Greater Fredericton Airport Authority Inc (2008) 209 DLR 405, where “post contractual modification that is unsupported by consideration, may be enforceable insofar as the variation was not procured under economic duress”
4. Whether one endorses “practical benefit” or “contract variation”, the objective is to prevent one party to exploit another, and to promote free negotiation of contract modification
   4a. The law should use duress rather than consideration as the regulator of contract modification
   4b. Intention to create legal relations have been established at the creation of first contract, and consideration has limited effectiveness to prevent coercive modification since “sufficient consideration” can easily be provided for, even in coercive situations, when practically it may actually be of NO BENEFIT to the party being coerced.
   4c. Defence of duress would be a more effective role!
5. Mindy Chen’s collateral unilateral framework possibly best explains the outcomes of these problematic cases, although that is not the reasoning employed by the courts

Question 34

Part Payment of a Debt - general rule? Which case supports the general rule?

Answer 34

Part payment of a debt is not good consideration for a promise to discharge the entire debt.
The case concerned is Foakes v Beer (1884) 9 App Cas 605, HL.
The court held that F’s part payment of his debt (excluding interest) to B’s agreement for the completion of debt was not good consideration, and B is entitled to recover interest for F’s debt.

Question 35

What are 4 reasons for the controversial and troublesome decision in FvB? What are the 3 reasons why FvB is still in place.

Answer 35

1. First, there was the issue if the agreement between FvB meant that F pays installments = principal, B forgoes interest. There is a good probability that B was tricked into such an agreement, yet the agreement was clear in that the sum did not include interest.
2. Second, the learned judges in FvB interpreted the rule in Pinnel’s case to mean that F did not provide good consideration for the agreement, meaning that B was not bound by her promise (even though she practically benefitted). Lord Blackburn in his judgement seemed to disagree with the rule in Pinnel, yet supported it insofar as the outcome was not unjust (B was tricked), and the unwillingness to overturn such an established rule.
3. Similar to the criticism of “practical consideration”, the rule from FvB shows the rigidity of application of consideration. It is easy to evade, as Long as the debtor provides fresh consideration that would be sufficient in The Eye of the law. The law seems to encourage artificial behaviour insofar as its recognition of good consideration is concerned.
4. FvB is out of step with modern developments in the doctrine of consideration, such as WvRB.

HOWEVER, FvB has survived for a Long time because:

1. It protects creditors from debtors
2. Precedent from HL
3. Consistent w general rule that promise to perform PED owed to promisor is not good consideration

Question 36

How does the rule in FvB protect creditors from unscrupulous debtors? Which case shows this? How did the judges differ?

Answer 36

D & C Builders v Rees [1966] 2 QB 617 CA

Court held that D&C was entitled to the remainder of the debt owed by R, even though there was an agreement to accept part payment in completion of the debt. Danckwerts and Winn L.J. used direct application for FvB, while Lord Denning used an argument of equity to explain and confine the application of FvB in this case.

Question 37

What is the significance of D&C v Rees?

Answer 37

Essentially Lord Denning’s application and interpretation of FvB, as opposed to the other judges traditional application of FvB solely based on the absence of consideration.

Denning argued that R behaved “inequitably” by threatening D&C through intimidation; they knew of D&C’s financial troubles and desperation for money.
Also reveals the importance of considering the factual matrix of each case and not use a single factor/rule (i.e. consideration) to get an equitable outcome. The legal doctrines of duress & intimidation are also relevant and provides the necessary legal tools to protect the creditor.

Denning’s reasoning also suggests that a creditor who voluntarily agrees to discharge a debtor after part payment of debt should be enforced, despite FvB. English law has not adopted this position based on the doctrine of consideration, but has applied the doctrine of promissory estoppel in such instances.

Question 38

Which case supports Denning’s reasoning for voluntary agreements for creditor to discharge debtor upon part payment of debt? How so?

Answer 38

Collier v P & MJ Wright (Holdings) Ltd [2007] EWCA Civ 1329, [2008] 1 WLR 643

CA held that C (applicant) had established an arguable case that promissory estoppel might afford him a defence to the claim of the remaining sum of debt to P&MJ Wright.

Arden L.J. drew from Denning’s reasoning in D&C Builders and High Trees, but mostly based on promissory estoppel that the creditor is bound by his voluntary acceptance of part payment to satisfy the whole debt. This is significant as using the doctrine of promissory estoppel, FvB could be reversed.

However, the other judge Longmore L.J., although accepting this reasoning, laid out that this required good evidence, and that the debtor must establish that the creditor had permanently given up his right to payment, and that it must be inequitable for the creditor to go back on his promise - the courts should not benevolently infer that the creditor had given up his rights permanently in claims of such agreements.

Question 39

In re Selectmove [1995] 1 WLR 474 CA

Answer 39

Court held that Selectmove did not provide good consideration for Inland Revenue’s promise to accept future tax and insurance liabilities as well as arrears in installments.

Peter Gibson L.J.’s judgment shows that FvB is still authoritative, and even more so than WvRB. If he applied “practical benefit” test, then FvB would have no application, as payment to a creditor would always be a practical benefit.
Also mentioned that WvRB did not consider FvB. The two cases can be reconciled insofar as WvRB concerned promise of additional payment for the same performance, while FvB concerned promise to accept less payment for a debt, but whether there is a difference in principle is another issue.

Question 40

Musumeci v Winadell Pty Ltd (1994) 34 NSWLR 723 (SC NSW)

Answer 40

M is a tenant in shopping centre, W is the landlord. Court held that W’s promise to reduce rent was supported by consideration, because W obtained practical benefit by increasing ability of M to remain in occupation, notwithstanding the competition, so W can maintain a full shopping centre. M suffered practical detriment by continuing under lease because of the risk of competition, when terminating their lease obligations could’ve been more beneficial for them.

The case is significant because it expands and refines the principles from WvRB, extending them to promises of concessions. However, it also blurs the distinction between FvB and WvRB (promise to accept less v promise to give more) because in this case it is a promise for concession, and also a recognition that part payment of debt constitutes practical benefit (supporting Lord Blackburn’s concerns).

So the FvB and WvRB debate continues, and YOU SHOULD FORMULATE SOME ARGUMENTS.

Question 41

Past Consideration - general rule

Answer 41

Past consideration is not good consideration. You cannot argue that you have provided consideration in the past for promises made in the present - hopes to makes the distinction between a bargain and a gift (followed by another promise of a gift)

Question 42

Eastwood v Kenyon (1840) 11 Ad & E 438, QB - just the facts.

Answer 42

The facts are a little confusing. E is the executor of Sarah’s father’s estate. K later became the Husband of Sarah. E took care of Sarah until she grew up, but her father’s estate was insufficient to provide for her, so he took up a loan. Sarah and K promised to repay E, and discharge his liability of debt. K failed to honor promise. Court held that K had no liability because his promise to pay E’s debt was unenforceable.

Question 43

East v Kenyon - significance? 3 points.

Answer 43

1. Lord Denman recognised rule that past consideration is no consideration
   1a. Recognised exceptions whereby the earlier act was performed at the request of promisor
   1b. Also recognises the role of ratification whereby ratifying an obligation that was not binding previously will generally incur liability (also with exceptions)
2. Seems like Denman did not want to enforce this as there were two distinct events, and the former event (E taking up a loan for Sarah) was independent of the latter event (K promising to pay). Also that the relation between both events had no intention to create legal relations, and it was mostly a gratuitous/moral move, and therefore unenforceable in law.
3. Also rejects that moral obligation can constitute good consideration. It supports that consideration helps prevent the legal sphere from interfering with the domestic/moral sphere. Wanted to avoid quasi-contractual liability whereby a person may be liable for a benefit is rendered to him without his authorisation, and voluntary reciprocity!

Question 44

Roscorla v Thomas (1842) 3 QB 234, QB

Answer 44

Held that T’s oral warranty that the horse he sold to R was “sound and free from vice” was not enforceable as no consideration had been provided. R’s consideration for the sale of the horse was insufficient to support the subsequent oral warranty.

Only issues is perhaps that its not a satisfactory outcome, why can’t the oral warranty be viewed to be a part of one overall transaction?

Question 45

Main exception to the rule of past consideration?

Answer 45

Pau On v Lau Yiu Long [1980] AC 614, Privy Council

P share owners of Shing On
L majority shareholders in Fu Chip.

L wanted to acquire Shing On’s principal asset - a building.
P wanted to increase value of the building by selling shares in Shing On.

Shing On shares —

Question 46

What are the three elements to be satisfied to be excepted from the past consideration rule, laid out by Lord Scarman in Pau On?

Answer 46

Plaintiff must show:
(A) P performed original act at D’s request
(B) Clearly understood/implied between parties at the request that P would be paid/compensated for the act
(C) D’s promise of payment must have been enforceable had it been made prior to or at the time at which P performed the act

Question 47

What is the significance of Pau On?

Answer 47

1. It is a recent example of endorsing the exception first laid out in Lampleigh v Brathwait (1615) for the past consideration rule
2. Also illustrates that a promise to perform, or the performance of a PED to a third party is valid consideration (P’s promise to L to perform their main contract with Fu Chip was sufficient for L’s promise of indemnity)
3. Scarman also rejected that consideration provided that is against public policy should be rejected (P’s consideration to keep to the main agreement w Fu Chip). Said that businessmen’s free negotiations should not be made void by the law unless unlawful means were involved, of which duress is an example.

Question 48

Consideration must move from the promisee

Answer 48

The promisee must provide consideration, and not a third party. Consideration does NOT have to move to the promisor.

Question 49

Requirement of Nexus

Answer 49

The nexus must be established between the act that is supposedly the consideration, and the promise made by the other party. In order to constitute consideration, the act must have been performed at the request, express or implied, of the promisor.

Question 50

Combe v Combe [1951] 2 KB 215, CA

Answer 50

Court held that plaintiff Wife did not provide any consideration for defendant Husband’s promise to provide £100/year. There is no consideration if the promisee incurs a detriment in reliance on/resulting from the promisor’s promise, but not IN RETURN FOR the promise!!

The Husband did not request any action/forbearance, expressly or implied, from the Wife when he made the promise, and so there was also no consideration provided by the Wife by forbearing to apply to Divorce Courts for maintenance (her application would have failed because she had a bigger income).

Question 51

Alliance Bank v Broom (1864)

Answer 51

B promised to provide security for its debt to A, but didn’t. A took action. Court held that that was an implied request for A to forbear legal action in return for B’s promise.

Question 52

Difference between Combe v Combe and Alliance Bank v Broom

Answer 52

1. A bank is more likely to impose legal proceedings against a debtor, than a Wife against Husband. Courts were willing to imply a request of forbearance in the former, but the latter was not as reasonable.
2. The circumstances of Combe was not unjust, the Wife was earning more, and she took 6 years before initiating action