Consideration

Question 1

Pollock definition of consideration.

Answer 1

An act of forebearance of one party which is the price for which the promise of another is bought.

Question 2

Must consideration be sufficient/adequate?

Answer 2

Consideration must be sufficient, need not be adequate - Chappell v Nestle.

Question 3

Is past consideration generally good consideration? Case. Exception + cases.

Answer 3

No - something new must be given. Roscorla v Thomas. However, it may be where:

1. Act performed at promisor’s request - Lampleigh v Braithwait.
2. Understanding of reward from outset - Re Casey’s Patents.
3. Intention and agreement present.

Question 4

Is performance of an existing contractual duty generally good consideration? Case.

Answer 4

No - Stilk v Myrick.

Question 5

Will an existing contractual duty be good consideration where the claimant exceeds his duty? Case.

Answer 5

Yes - Hartley v Ponsonby.

Question 6

Is an existing contractual duty good consideration for a contract with a third party? Case.

Answer 6

Yes - Scotson v Pegg.

Question 7

In commercial situations, when will an existing contractual duty be good consideration? 5 criteria. Case.

Answer 7

Williams v Roffey Bros.

1. Contract for supply of goods/services in return for payment.
2. Promisor doubts whether promisee will complete his obligations.
3. Promisor offers extra payment for completion.
4. As a result, promisor obtains practical benefit or obviates a disbenefit.
5. There is no fraud or duress.

Question 8

Definition of duress. On whom is the burden?

Answer 8

Illegitimate threat or pressure (distinct from normal commercial pressure) which induces a party to contract. Onus on claimant to show there has been duress.

Question 9

3 criteria to establish duress. Case.

Answer 9

Carillion Construction v Felix.

1. Illegitimate threat or pressure.
2. Leaving the claimant with no practical alternative.
3. Which was a significant factor in inducing the contract.

Question 10

What is the effect of duress on a contract? 2 schools of thought. Cases.

Answer 10

1. Void - Atlas Express v Kafco.

2. Voidable - Opel v Mitras.

Question 11

Remedy for duress. 4 bars + case in which 2 applied.

Answer 11

1. Delay - Atlantic Baron.
2. Affirmation - Atlantic Baron.
3. Impossible to substantially return property.
4. Innocent party has acquired an interest in the property.

Question 12

Is part payment of debt generally good consideration for a promise to forego the balance? Case. 1 exception. Case.

Answer 12

No - Foakes v Beer. Unless something else is given, e.g. other consideration; early payment - Pinnel’s Case.

Question 13

Promissory estoppel - 4 criteria. Cases.

Answer 13

Lord Denning in High Trees House.

1. Promisor promises to waive a strict legal right.
2. Promisee changes position in reliance on the promise, although not necessarily to detriment - Alan v El Nasr.
3. Inequitable for promisor to renege and insist on strict legal rights - D&C Builders v Rees.
4. Used as shield not sword - Combe v Combe.

Question 14

Effect of promissory estoppel on ongoing payments. Case.

Answer 14

Rights suspended. Right to arrears extinguished. Promisor can give reasonable notice and reasonable adjustment period and will then be entitled to full legal rights - Tool Metal v Tungsten Electric.

Question 15

What occurs if the promisee is unable to return to their previous position? Case.

Answer 15

Promisor’s rights may be permanently extinguished - Ajayi v Briscoe.

Question 16

Effect of promissory estoppel on one-off payments? Case.

Answer 16

Position uncertain, although payment may be waived - D&C Builders v Rees.