Consideration

Question 1

Define Consideration - Price one Pays for another’s Promise

Answer 1

3 P’s of Pollock

Question 2

Define Consideration - Some right, interest, profit or benefit accruing to the party or some forbearance, detriment, loss or responsibility, given, suffered, or undertaken

Answer 2

Currie Misa

Question 3

Define Consideration - Consists of either detriment or benefit however both Promisee-detriment and Promisor-benefit do bot have to coexist

Answer 3

O’Sullivan v Management Agency

Question 4

Identify Consideration - Consideration need not be adequate but must be sufficient

Answer 4

Chappell v Nestle

Question 5

Identify Consideration - Must have some economic value

Answer 5

Thomas v Thomas

Question 6

Identify Consideration - Is forbearance good consideration?

Answer 6

• Not usually, due to public policy issues (floodgates) - White v Bluett
• Maybe, if involves giving up one’s legal rights - Homer v Sidney

Question 7

Is Past Consideration Good Consideration? - General Rule

Answer 7

No - Roscorla v Thomas

Question 8

Is Past Consideration Good Consideration? - Exceptions

Answer 8

i. Act was carried out at Promisor’s request - Lampleigh v Braithwait
ii. The parties understood from the outset that the act was to be rewarded in some way - Re Casey’s Patents
iii. All other requirements for a valid, binding contract exist

Question 9

Is A’s performance of Existing Contractual Duties Good Consideration in Exchange for a Promise from B to Pay More? - General Rule

Answer 9

No – Stilk v Myrick

Question 10

Is A’s performance of Existing Contractual Duties Good Consideration in Exchange for a Promise from B to Pay More? - Exceptions

Answer 10

1. A exceeds his duties or confers additional benefit on B (question of fact) - Hartley v Ponsonby
2. If the Williams v Roffey Glidewell Principles are satisfied

Question 11

Williams v Roffey Glidewell Principles

Answer 11

i. Contract to do work / supply goods and services in return for payment
ii. B doubts whether A will complete his obligations
iii. B promises additional payment if A complete his obligations on time
iv. As a result of giving this promise, B obtains a practical benefit or obviates a disbenefit
v. B’s promise to pay extra is not given as a result of economic duress or fraud on the part of A

Question 12

Is A’s performance of his Existing Contractual Duties to a Third Party Good Consideration?

Answer 12

Yes – A promise to do something can amount to consideration even if the Promisor is already bound to perform this obligation for another party - Scotson v Pegg

Question 13

Is the performance of one’s Public/Legal Duties Good Consideration? - General Rule

Answer 13

No – Collins v Godefroy

Question 14

Is the performance of one’s Public/Legal Duties Good Consideration? - Exceptions

Answer 14

Yes, if;

i. Not contrary to Public Policy - Williams v Williams
ii. Public Duty is exceeded - Glasbrook Bros

Question 15

Is the Part Payment of Undisputed Debts Good Consideration for a Promise by the Creditor to Forgo the Balance? - General Rule

Answer 15

No -Foakes v Beer

Question 16

Is the Part Payment of Undisputed Debts Good Consideration for a Promise by the Creditor to Forgo the Balance? - Exception 1

Answer 16

Pinnel’s Case – Good consideration if the Debtor gives;

i. Something different; or
ii. Pays early

Question 17

Is the Part Payment of Undisputed Debts Good Consideration for a Promise by the Creditor to Forgo the Balance? - Exception 2

Answer 17

High Trees House – Promissory Estoppel

Question 18

Promissory Estoppel

Answer 18

Where a Promisor has, by words or conduct, made a promise to the other party to forgo the legal right, once the other party 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

Doctrine of Promissory Estoppel will apply if the following conditions are satisfied;

Answer 19

1st. Promise… to waive a legal right which must be intended to be acted upon by the other party – Hughes v Met
2nd. Reliance… by the Promisee on the Promise – Need not have acted to his detriment, only alter his behaviour – Alan v El Nasr
3rd. Inequitable… or Unjust for the Promisor to go back on his promise and insist his full legal rights – D&C Builders v Rees
4th. Defence… Promissory Estoppel is not a cause of action – Shield not Sword – Combe v Combe
5th. Effect… is to extinguish or suspend legal rights

Question 20

Effect of Promissory Estoppel - Usually operates to suspend the Promisor’s legal rights – Promisor may resume these rights by giving the Promisee Reasonable Notice

Answer 20

Tool Metal v Tungsten

Question 21

Effect of Promissory Estoppel - In cases where the Promisee cannot resume his original position – Promissory Estoppel may operate to permanently extinguish the Promisor’s legal rights

Answer 21

Ajayi v RT Briscoe

Question 22

Effect of Promissory Estoppel - Effect on one-off debts is uncertain – May operate to waive payment

Answer 22

D&C Builders v Rees