Consideration cases Flashcards
What is consideration?
This means that both parties to a contract will give something by way of exchange.
What are the five established rules of consideration?
1) Consideration does not need to be adequate, but must be sufficient.
2) Past consideration is not consideration.
3) Consideration must move from the promisee.
4) Performing an existing duty is not consideration for a new contract.
5) A promise to accept part payment of a pre-existing debt, in place of a whole debt, is not consideration.
Explain ‘consideration does not need to be adequate but must be sufficient’ using a case.
Consideration must be something of value in the eyes of the law - A one sided promise which is not supported by consideration is a gift.
The parties to the contract themselves agree the values of things being exchanged is acceptable, this can be seen in the case of Thomas v Thomas whereby £1 was sufficient for rent.
What would be another case for adequate consideration relating to nominal value?
Chappell v Nestle
What is a case for going beyond legal duty amounting to consideration?
Ward v Byham
Explain past consideration.
Consideration has no value where it has already been done by the
time of the agreement, i.e if tutoring is given and an has been exam sat, offering to pay after the exam is not a binding contract as the consideration (tutoring) has already happened.
Case for past consideration?
Re McArdle
What is the exception to past consideration?
Where there is an implied or expressed request to perform the task and an implied understanding that the task will be paid for. (R v Casey’s Patent)
Alternatively, when the matter can be so important itself that
consideration is implied. Lampleigh v Braithwait
Explain the rule of ‘Consideration must move from the promisee’ with a case.
This means that a person cannot sue or be sued under a contract unless he or she has provided consideration for it.
For example, in Tweddle v Atkinson the claim failed because the consideration had not moved from the claimant, and he was not a party to the agreement himself. It was a deal between fathers.
Explain ‘Performing a pre-existing duty cannot be consideration for a new contract’ with a case.
Performing under a pre-existing duty is not consideration as seen in the case of Collins v Godefroy.
Here the policeman was asked to attend court by the defendant (who offered money to do so) but the policeman was already under a pre-existing duty to attend court so this act wasn’t consideration.
What are the 3 ways of having a pre-existing duty?
1) A duty imposed under a public duty to act – the police doing their public duty.
2) A duty imposed under an existing contract with the promisor, such as in a contract of employment, doing their job.
3) A promise to make payment of an already existing debt, such as repaying a loan.
However, what are the exceptions to the pre-existing duty rule? ( 2 cases too)
1) Going beyond the existing duty, requiring extra payment, there is consideration. (Glasbrook Bros v Glamorgan Council)
2) If there is a great change in circumstances and workload, this can amount to consideration (Hartley v Ponsonby)
Explain ‘A promise to accept part payment of an existing debt, in place of the whole debt, is not consideration’ with a case.
The payment of a lesser sum on the day the debt is due cannot be in satisfaction of the greater debt even if agreed between the two parties.
For example, in Foakes V Beer the two reached an agreement for Foakes to pay in instalments with Mrs Beer agreeing that no further action would be taken if the debt was paid off by an agreed date.
Later, Mrs Beer demanded the interest to which she was entitled to under a ‘judgement debt’ and successfully sued Foakes when he refused.
What can be an exception of the debt payed in full rule?
Accepting something other than money for the whole debt is consideration – even if it is not of equal value to the debt. This must be done at the request of the creditor not the debtor. For example, A is owed £1000 by B and A suggested that B give him £200 and B’s car to settle the debt. B agrees
