Consideration & ITCLR Flashcards
Define consideration
Each party to a contract must give something(executed) or promise to give something (executory) of some monetary value
Consideration need not be adequate but it must be sufficient.
Adequate - NOT EQUAL.
THOMAS V THOMAS
Sufficient - real, tangible, some value
CHEPPELL V NESTLE
When is consideration sufficient?
RULE 1
3 points and cases
POL: Perfromance of an existing contractual duty cannot be sufficient consideration.
STILK V MYRICK
It will be if the D has done MORE than what was identified in contract
HARTLEY V PONSONBY
POL: It will also be an exception if party receives VALUABLE BENEFIT
WILLIAM V ROFFEY BROS
When is consideration sufficient?
RULE 2
Duty imposed by law.
POL: A promise to perform a duty which the law already demands be carried out is NOT sufficient consideration
COLLINS V GODEFROY
POL: However if one person goes beyond his legal duty then he cane for certain this promise.
GLASBROOK BROS V GLAMORGAN COUNCIL
When is consideration sufficient?
RULE 3
Part payment of a debt in place of the whole debt is not sufficient consideration.
PINNEL’s
D&C BUILDERS V REES
Exceptions to the rule in PINNELS
1) If the creditor agrees to accept something other than money for the whole debt then it’s consideration, even if it’s not at equal value.
2) if the creditor has asked for payment on an earlier date
Past consideration
POL: Past consideration is defined as something already done at the time the agreement was made. Where the consideration is past, there will not be a valid contract.
REMCARDLE
2 exceptions to the rule that past consideration is no consideration.
1) Where A requests some performance form B on the common understanding that there will be a contract and payment
LAMPLEIGH V BRAITHWAITE
2) Where there is an expedition of payment as in a commercial or professional contract.
RE CASEY PATENTS
Privity if contract.
POL: a person who is not a party to the contract can neither sue not be sued under it.
TWEDDLE V ATKINSON
Modern statement is found in:
DUNLOP TYRE CO V SELFRIDGE
Lord Haldene “Only a person who is party to the contract can sue on it”
Harsh consequences of the privity rule:
- a person receiving goods as a gift maybe unable to sue personally if defective.
- the rule may prevent a benefactors express wishes being denied - TWEDDKE V ATKINSON
Exceptions to privity rule
- Common law exception - contracts for the benefit of the group
JACKSON V HORIZON HOLIDAY
*Statutory exceptions - 3rd party motor insurance
Rights of 3rd parties act
Someone who is not a party to a contract may enforce the contract against either of both actual parties if:
- The 3rd party is expressly named in the contract or a member of a class or answering a patocular description AND
- The contract expressly provides that the 3rd party may enforce the contract OR
- The contract term is to give a benefit to the third party.
Gets around problems that occurred in BESWICK V BESWICK
Define ITCLR
The parties to a contract must intend the agreement to be legally binding. This is implied in commercial agreements but presumed to not exist in social or domestic agreements.
Commercial: law presumes parties wish to be bound to a contract
Social/Domestic: Law presumed party do not wish to be part of a contract: family/friend/neighbour
Commercial agreements
2
POL: The general principle is that an invention to create legal relations is presumed in commercial agreements.
MCGOWAN V RADIO BUXTON
POL: Thus presumption of itclr can be rebutted if party shows wasn’t meant to be commercial.
JONES V VERNON POOLS
Social or domestic agreements
POL: The general principle is that an intention to create legal relations is not presumed in social or domestic agreements.
BALFOUR V BALFOUR
