Contract 1.2- Consideration

Question 1

What is Intention to Create Legal Relations?

Answer 1

An intention to enter into a contract with legal ramifcations ⛓️👨‍⚖️

Question 1

When are assumptions as to ICLR made?

Answer 1

• Commercial: there’s intention 🏪
• Domestic: no intention 👨‍👩‍👧‍👦
  Both can be rebutted

Question 2

What does the term ‘subject to contract’ mean?

Answer 2

Not binding until formal execution

Question 3

What is consideration and its 2 types?

Answer 3

An exchange between the parties

2. Executed: at start of contract, consideration has already been performed 🗡️😇
3. Executory: parties make promises to each other to perform something in the future 🗡️🔮

Question 4

What is the rule of ‘consideration must not be past’ and what is the exception?

Answer 4

General Rule: If act was before promise, can’t be exchange for that promise

Exception: Always understood they’d be paid:
- promisor requested act 🗣️
- Parties understood there would be benefit 💷🧑‍🌾
- Benefit legally enforceable had it been promised in advance 🧑‍🌾🧑‍⚖️

Question 5

Explain alteration promises to pay more

Answer 5

• Perform existing duty with additional payment = not good consideration
• Exceed duty = good consideration
• Do same duty for TP = good consideration
• Not exceed contractual duty but practical benefit = good consideration as long as no duress

Question 6

Explain alteration promises to pay less

Answer 6

General rule: Not extinguish creditors right to sue for remaining balance

Exception
- Debtor gives something diff (Pinells case)
- PE- Promiser clear & unambiguous promise to forgo strict rights under contract + Promisee acts on promise & behaves equitably- unfair to go back on promise without reasonable notice

Question 7

What is promissory estoppel?

Answer 7

Protecting a party’s reliance on a non-bargain promise, commonly used for debts

• shield, not a sword 🛡️
• Clear, unequivocal promise that strict legal rights won’t be fully enforceable 🔍🤝⛓️
• Change of position in reliance on the promise (need not show detriment) 🥳
• Inequitable to allow promisor to go back on the promise ⚖️

Question 8

Can a lender bring a payment holiday to an immediate end?

Answer 8

• Where no certainty when going to end = reasonable notice must be given
• Where certainty = no notice needed- may end as soon as condition has been met