Consideration Flashcards
Definition of consideration
Some benefit to the promisor or some detriment to the promisee
Rules on consideration
Must be sufficient but need not be adequate
What is executory consideration?
Promises are exchanged to perform acts in the future
What is executed consideration?
One party performs an act in order to fulfil a promise made by the other
Past consideration?
Not sufficient consideration
Exceptions to past consideration
- Act must have been done at promisor’s request
- Parties must have believed the act would be remunerated
- The promise would be legally enforceable if it had been promised in advance
Who must provide consideration?
Consideration must move from the promisee
Performance of an existing duty as consideration?
Performing an existing duty which his is already bound to do is not sufficient consideration
Exceptions to existing duty rule?
- When a duty is exceeded
- When there is an existing contractual duty owed to a third party
Common law rule on party payment of debt
Part payment of debt is not good consideration for the whole and payment on due date of a lesser sum is not good consideration
Exceptions to part payment rule
If payment is made:
- Before due date
- By different means, something more valuable at the time
- In a different place than originally specified
What is an upward variation?
When A wants more from B for performing an existing contractual obligation
Practical benefit consideration?
Performance of an existing contractual duty will be good consideration for a promise of extra payment if it confers a real practical benefit to the promisor
Exceptions to practical benefit consideration?
If the promise to pay extra was only made under economic duress, the variation may be avoided
