consideration REV Flashcards
The definition of consideration arises from case law, which two cases in particular?
Currie v Misa and
Dunlop v Selfridge
What happened in the case of Currie v Misa, under the definition of consideration?
I have the currrrreeeee!
The case involved a dispute concerning the stopped payment of a cheque; Lush J referred to consideration as consisting of some right, interest, profit or benefit accruing to the one party, or some forbearance, detriment, loss or responsibility, given, suffered or undertaken by the other
The case involved a dispute concerning the stopped payment of a cheque; Lush J referred to consideration as consisting of some right, interest, profit or benefit accruing to the one party, or some forbearance, detriment, loss or responsibility, given, suffered or undertaken by the other
What happened in the case of Currie v Misa, under the definition of consideration?
How did Dunlop v Selfridge under the definition of consideration define consideration?
the 2 D’s
Lord Dunedin approved of A more sophisticated definition was provided by Pollock in Principles of Contract which was approved by the HOL in the case as: ‘An act of forbearance or the promise thereof is the price for which the promise of the other is bought, and the promise thus given for value is enforceable
Lord Dunedin approved of A more sophisticated definition was provided by Pollock in Principles of Contract which was approved by the HOL in the case as: ‘An act of forbearance or the promise thereof is the price for which the promise of the other is bought, and the promise thus given for value is enforceable
How did Dunlop v Selfridge under the definition of consideration define consideration?
What are the 3 principle rules of consideration?
consideration must move from the promisee
consideration must not be past
consideration must be sufficient but need not be adequate
What does consideration must move from the promisee mean?
that the person to whom a promise is made can only enforce that promise if they themselves provided consideration for it
How did Atiyah describe consideration?
described consideration as more often just a reactive overlay on top of judicial policy-policy-preference in each particular case
described consideration as more often just a reactive overlay on top of judicial policy-policy-preference in each particular case
How did Atiyah describe consideration?
How may a promise not supported by consideration nevertheless be given legal effect?
s a result of the operation of an estoppel; however this is limited by a number of rules including the fact estoppel cannot create a cause of action
What case is an example of the fact:
a promise not supported by consideration nevertheless be given legal effect as a result of the operation of an estoppel; however this is limited by a number of rules including the fact estoppel cannot create a cause of action
Combe v Combe
What happened in Combe v Combe
a promise not supported by consideration nevertheless be given legal effect as a result of the operation of an estoppel; however this is limited by a number of rules including the fact estoppel cannot create a cause of action
In this case, H promised W a permanent allowance annually and so W did not apply for maintanence. H did not ask her not to apply.
HELD:
No enforceable contract because no consideration
She also argued that he was estopped from going back , which also failed
In this case, H promised W a permanent allowance annually and so W did not apply for maintanence. H did not ask her not to apply.
HELD:
No enforceable contract because no consideration
She also argued that he was estopped from going back , which also failed
Combe v Combe
In what case was the question as to whether how clear and certain the distinction is between consideration and a condition was explored?
Chappell and Co v Nestle
What happened in the case of Chappell and Co vNestle
the question as to whether how clear and certain the distinction is between consideration and a condition was explored
Nestle offered a record, owned by Chappell, for a small cash payment below retail price and 3 chocolate wrappers. Chappell sued to prevent the promotion since they would receive a much lower royalty payment
ISSUE:
Was this combined payment consideration or was the presentment of the wrappers a condition of the performance, with the real consideration being the cash payment?
HELD:
All consideration
‘a pepper corn does not cease to be good consideration if it is established that the promisee does not like pepper and will throw away the corn’
Nestle offered a record, owned by Chappell, for a small cash payment below retail price and 3 chocolate wrappers. Chappell sued to prevent the promotion since they would receive a much lower royalty payment
ISSUE:
Was this combined payment consideration or was the presentment of the wrappers a condition of the performance, with the real consideration being the cash payment?
HELD:
All consideration
‘a pepper corn does not cease to be good consideration if it is established that the promisee does not like pepper and will throw away the corn’
What happened in the case of Chappell and Co vNestle
the question as to whether how clear and certain the distinction is between consideration and a condition was explored
What are the 5 principle criticisms against the doctrine of consideration?
1) too narrow in scope and so fails to give effect to promises that ought to have legal effect
2) doctrine has become too technical (Treitel’s classic textbook of contract it exceeds 100 pages)
3) doctrine is divorced from commercial reality; lawyers can easily use a payment of even £1 to suffice consideration
4) difficult to reconcile consideration with any of the modern theoretical models of contract law; why does it insist upon the presence of consideration where the contract is base upon the will of the parties
5) Argued that the work of the doctrine could be done more effectively by more specific doctrines such as unconscionability, estoppel and intention to create legal relations all of which target with more precision
There is a criticism of consideration that it has become too technical, what is evidence of this?
in Treitel’s classic textbook of contract exceeds 100 pages)
What case supports the 5 principles criticisms of consideration?
white v jones
White v Jones supports the 5 principle criticisms of consideration:
explain
our law of contract is widely seen as deficient in the sense that it is perceived to be hampered by the presence of an unnecessary doctrine of consideration
our law of contract is widely seen as deficient in the sense that it is perceived to be hampered by the presence of an unnecessary doctrine of consideration
White v Jones supports the 5 principle criticisms of consideration:
explain
What is the key case supporting that consideration must be sufficient but need not be adequate?
Thomas v Thomas
What happened in the case of Thomas v Thomas under onsideration must be sufficient but need not be adequate?
married
A husband expressed a wish that his wife should be allowed to remain in their house after his death. This was not written in his will. After his death, his executors allowed his wife to stay at a rent of £1 per year. They later tried to dispossess her.
HELD:
The payment of the ‘peppercorn’ rent was sufficient consideration for the contract to be enforceable. The husbands wish alone however would not have been sufficient consideration
A husband expressed a wish that his wife should be allowed to remain in their house after his death. This was not written in his will. After his death, his executors allowed his wife to stay at a rent of £1 per year. They later tried to dispossess her.
HELD:
The payment of the ‘peppercorn’ rent was sufficient consideration for the contract to be enforceable. The husbands wish alone however would not have been sufficient consideration
What happened in the case of Thomas v Thomas under consideration must be sufficient but need not be adequate?
Under consideration must be sufficient but need not be adequate, what must consideration be to be sufficient in law? (3)
a) valuable
b) tangible
c) real
Under which part of consideration are the requirements of
a) valuable
b) tangible
c) real
consideration must be sufficient but need not be adequate
under consideration must be sufficient but need not be adequate, what does the requirements that for consideration to be sufficient in law they must be a) valuable b) tangible c) real mean/suggest?
This means that consideration requires the existence of a bargain but it does not demand that the bargain be a good one.
under consideration must be sufficient but need not be adequate,the requirements that for consideration to be sufficient in law they must be
a) valuable
valuable
suggests that This means that consideration requires the existence of a bargain but it does not demand that the bargain be a good one. What case considered this and how?
This was considered in Chappell as discussed. Eventhough the acquisition of wrappers did not directly benefit the nestle co, they were still held to be part of the consideration even though they had no pecuniary value
under consideration must be sufficient but need not be adequate,the requirements that for consideration to be sufficient in law they must be
b) tangible
what 2 cases were considered as a) tangible and b) not tangible?
White v bluett
and
Ward v Bytham- tangible
a son attempted to claim that he did not owe his late father’s estate repayment of a sum of money due on a promissory note since he had agreed with his father the debt would be written off in return for his promise not to complain about his father’s will
HELD:
This promise was insufficiently tangible to amount to good consideration
What case
White v Bluett
tangible
under consideration must be sufficient but need not be adequate
White v Bluett
tangible
under consideration must be sufficient but need not be adequate
too late you blew it !
a son attempted to claim that he did not owe his late father’s estate repayment of a sum of money due on a promissory note since he had agreed with his father the debt would be written off in return for his promise not to complain about his father’s will
HELD:
This promise was insufficiently tangible to amount to good consideration
What case
Ward v Bytham
tangible
under consideration must be sufficient but need not be adequate
a mother’s promise to keep her illegitimate child’s upkeep from its father was held to be sufficient consideration since there was no legal duty to keep a child happy
a mother’s promise to keep her illegitimate child’s upkeep from its father was held to be sufficient consideration since there was no legal duty to keep a child happy
Ward v Bytham
tangible
under consideration must be sufficient but need not be adequate
under consideration must be sufficient but need not be adequate,the requirements that for consideration to be sufficient in law they must be
c) real
what case was real considered in and how?
Arrale which held that it is no consideration to refrain from a course of action which it was never intended to pursue
which held that it is no consideration to refrain from a course of action which it was never intended to pursue
under consideration must be sufficient but need not be adequate,the requirements that for consideration to be sufficient in law they must be
c) real
Arrale
What case reflects that the courts have tended to adopt a benevolent approach to alleged considerations in commercial cases?
Bainbridge
Bainbridge reflects that the courts have tended to adopt a benevolent approach to alleged considerations in commercial cases
The defendant asked for permission to weigh two of the plaintiff’s boilers and return them in the same condition. The defendant took the boilers to pieces but failed to put them together again. The defendants agued there was no consideration had been provided for his promise to restore the boilers HELD: Found that there was consideration as the plaintiff consent to allow the defendant to weigh the boilers at some benefit but also detriment to the plaintiff for his parting with the boiler
what case was considered under the fact that a promise to give up a worthless claim can amount to consideration provided the person who gives up the claim is acting in good faith?
Cook v Wright
Cook v Wright
case was considered under the fact that a promise to give up a worthless claim can amount to consideration provided the person who gives up the claim is acting in good faith?
you crook i couldve been right
Notice was given to the defendant occupier of a house calling him to pay his share of the cost of the works done in an adjoining street. The defendant objected he was not liable to make a contribution as he was not the owner of the house. He later promised to pay a reduced contribution after being threatened with legal action. He paid the first instalment then refused to pay.
HELD:
promise was supported by consideration; the plaintiffs had suffered a detriment in that the compromise had induced them not to take proceedings against the actual owner of the house
Notice was given to the defendant occupier of a house calling him to pay his share of the cost of the works done in an adjoining street. The defendant objected he was not liable to make a contribution as he was not the owner of the house. He later promised to pay a reduced contribution after being threatened with legal action. He paid the first instalment then refused to pay.
HELD:
promise was supported by consideration; the plaintiffs had suffered a detriment in that the compromise had induced them not to take proceedings against the actual owner of the house
Cook v Wright
case was considered under the fact that a promise to give up a worthless claim can amount to consideration provided the person who gives up the claim is acting in good faith?
you crook i couldve been right
The general rule is that past consideration is not good consideration, what rule is this linked to?
the bargain theory of consideration
The general rule is that past consideration is not good consideration; a rule linked to the bargain theory of consideration.
What was this general rule established by?
two cases in the 19th century
- Eastwood
- Roscorla
The general rule is that past consideration is not good consideration; a rule linked to the bargain theory of consideration.this general rule established by
two cases in the 19th century
1. Eastwood
2. Roscorla
discuss Eastwood
clint eastwood is a thief
X borrowed money to support W. W became an adult and married H. H agreed to pay X’s debt but failed to do so. X sued in contract.
HELD:
Consideration here is past therefore no enforceable contract
there was no bargained for exchange between X and H, rather it was a gratuitous promise
X borrowed money to support W. W became an adult and married H. H agreed to pay X’s debt but failed to do so. X sued in contract.
HELD:
Consideration here is past therefore no enforceable contract
there was no bargained for exchange between X and H, rather it was a gratuitous promise
The general rule is that past consideration is not good consideration; a rule linked to the bargain theory of consideration.this general rule established by
two cases in the 19th century
1. Eastwood
2. Roscorla
discuss Eastwood
clint eastwood is a thief
What was the criticism of the case of Eastwood :
X borrowed money to support W. W became an adult and married H. H agreed to pay X’s debt but failed to do so. X sued in contract.
HELD:
Consideration here is past therefore no enforceable contract
there was no bargained for exchange between X and H, rather it was a gratuitous promise
The general rule is that past consideration is not good consideration; a rule linked to the bargain theory of consideration.this general rule established by
two cases in the 19th century
1. Eastwood
2. Roscorla
discuss Eastwood
Counsel for the defendant held that the rule of nudum pactum ( it refers to a promise that is not legally enforceable for want of consideration.) is too narrow and maintained that all promises deliberately made ought to be held binding
Which case shows an exception to the rule that past consideration is not consideration, which was not applicable to Eastwood as the defendant had not asked the plaintiff to borrow money ?
Lampleigh
Why can’t moral obligations such as that in Eastwood be literally applied?
as this would eliminate the need for consideration all together
The general rule is that past consideration is not good consideration; a rule linked to the bargain theory of consideration.this general rule established by
two cases in the 19th century
1. Eastwood
2. Roscorla
discuss Roscorla
The plaintiff bought a horse from the defendant for a sum of money. No warranties as to quality were given. After the sale the defendant gave the plaintiff an oral warranty that the horse was sound and free of vice which turned out to be false.
HELD:
No enforceable contract as to warranty
The plaintiff bought a horse from the defendant for a sum of money. No warranties as to quality were given. After the sale the defendant gave the plaintiff an oral warranty that the horse was sound and free of vice which turned out to be false.
HELD:
No enforceable contract as to warranty
The general rule is that past consideration is not good consideration; a rule linked to the bargain theory of consideration.this general rule established by
two cases in the 19th century
1. Eastwood
2. Roscorla
discuss Roscorla
In order to ascertain whether consideration was past, courts will look at the sequence of events. What case considered this?
Re McArdle
In order to ascertain whether consideration was past, courts will look at the sequence of events.
This was considered in Re McArdle”
emily mcArdle was too late I already got the dress
a son and his wife lived in his mothers home which was to pass to her 4 sons upon her death. The mother made the 4 children sign an agreement to pay her daughter in law back from the proceeds of the estate.They refused.
Daughter in law’s claim was unsuccessful. She had already performed the act before the promise to pay was made. Her consideration was past and the promise to pay was unenforceable
a son and his wife lived in his mothers home which was to pass to her 4 sons upon her death. The mother made the 4 children sign an agreement to pay her daughter in law back from the proceeds of the estate.They refused.
Daughter in law’s claim was unsuccessful. She had already performed the act before the promise to pay was made. Her consideration was past and the promise to pay was unenforceable
In order to ascertain whether consideration was past, courts will look at the sequence of events.
This was considered in McArdle”
case shows an exception to the rule that past consideration is not consideration, which was not applicable to Eastwood as the defendant had not asked the plaintiff to borrow money ?
Discuss Lampleigh
the defendant killed another man and asked the plaintiff to secure him a pardon. The plaintiff went to considerable effort and expense to do so who subsequently promised to pay, which he failed to do
HELD:
The plaintiff’s claim was successful even though his consideration was past in relation to the promise to pay. However the court considered the original request by the defendant contained an implied promise that he would reward and reimburse the plaintiff for his efforts; and therefore apart of the same transaction
the defendant killed another man and asked the plaintiff to secure him a pardon. The plaintiff went to considerable effort and expense to do so who subsequently promised to pay, which he failed to do
HELD:
The plaintiff’s claim was successful even though his consideration was past in relation to the promise to pay. However the court considered the original request by the defendant contained an implied promise that he would reward and reimburse the plaintiff for his efforts; and therefore apart of the same transaction
case shows an exception to the rule that past consideration is not consideration, which was not applicable to Eastwood as the defendant had not asked the plaintiff to borrow money ?
Discuss Lampleigh
As an exception to the rule that consideration must not be past; it is established that if services are rendered on request and both parties understand that payment will be made, the promise may be enforceable even though consideration is past. What was was this restated in?
Pao On v Lau Yiu Long
As an exception to the rule that consideration must not be past; it is established that if services are rendered on request and both parties understand that payment will be made, the promise may be enforceable even though consideration is past. This was restated by Lord Scarman in Pao On v Lau Yiu Long. In what 3 ways was this restated?
1) The act must have been done at the promisor’s request
2) The parties must have understood that the act was to be remunerated further by a payment or the conferment of some other benefit
3) the payment, or conferment of a benefit, must have been legally enforceable had it been promised in advance
1) The act must have been done at the promisor’s request
2) The parties must have understood that the act was to be remunerated further by a payment or the conferment of some other benefit
3) the payment, or conferment of a benefit, must have been legally enforceable had it been promised in advance
As an exception to the rule that consideration must not be past; it is established that if services are rendered on request and both parties understand that payment will be made, the promise may be enforceable even though consideration is past. This was restated by Lord Scarman in Pao On v Lau Yiu Long. In what 3 ways was this restated
As an exception to the rule that consideration must not be past; it is established that if services are rendered on request and both parties understand that payment will be made, the promise may be enforceable even though consideration is past. This was restated by Lord Scarman in Pao On v Lau Yiu Long.
Discuss this case
In this case the defendant asked the plaintiff to promise not to sell certain shares for a year. Defendant later promised to indemnify plaintiff if shares fell below a certain price. Plaintiff sued on the indemnity and defendant defended on grounds of past consideration HELD: Indemnity was enforceable.
In this case the defendant asked the plaintiff to promise not to sell certain shares for a year. Defendant later promised to indemnify plaintiff if shares fell below a certain price. Plaintiff sued on the indemnity and defendant defended on grounds of past consideration HELD: Indemnity was enforceable.
As an exception to the rule that consideration must not be past; it is established that if services are rendered on request and both parties understand that payment will be made, the promise may be enforceable even though consideration is past. This was restated by Lord Scarman in Pao On v Lau Yiu Long.
under the fact that consideration must move from the promisee, what is the basic rule?
the basic rule is privity of contract; namely that only a party to the contract can sue on that contract. The promise therefore cannot be enforced if the consideration moved from a third party
the basic rule is privity of contract; namely that only a party to the contract can sue on that contract. The promise therefore cannot be enforced if the consideration moved from a third party
What case considered this?
Tweedle v Atkinson
the basic rule is privity of contract; namely that only a party to the contract can sue on that contract. The promise therefore cannot be enforced if the consideration moved from a third party
discuss Tweedle v Atkinson
In this case, the plaintiff’s father and the father of his intended bride both agreed to both pay money to the husband , the plainitff, but Guy died before paying it and his executors refused to pay the money The Plaintiff’s claim failed even though he was named in the agreement, he had not himself given consideration to the agreement
In this case, the plaintiff’s father and the father of his intended bride both agreed to both pay money to the husband , the plainitff, but Guy died before paying it and his executors refused to pay the money The Plaintiff’s claim failed even though he was named in the agreement, he had not himself given consideration to the agreement
the basic rule is privity of contract; namely that only a party to the contract can sue on that contract. The promise therefore cannot be enforced if the consideration moved from a third party
Tweeedle v Atkinson
