Contract - Consideration

Question 1

Consideration is the price you pay for another’s promise

Answer 1

Pollock

Question 2

Consideration need not be adequate but must be sufficient

Answer 2

Nestle v Chappell

Question 3

Consideration must have some sort of economic value

Answer 3

Thomas v Thomas

Question 4

General rule: Past consideration is not good consideration

Answer 4

Roscorla v Thomas

Question 5

What three conditions need to be met for past consideration to be good consideration?

Answer 5

1- Act carried out at promisor’s REQUEST
2- Parties understood the act would be REWARDED in some way from the beginning
3- Other REQUIREMENTS for valid contract met

Question 6

General rule: Performance of existing contractual duties is not good consideration for the promise to pay more

Answer 6

Stilk v Myrick

Question 7

Exception: Exceeding duties in some way or offering extra benefit is good consideration for the promise to pay more

Answer 7

Hartley v Ponsonby

Question 8

If the Glidewell principles are met, performance of existing contractual duties will be good consideration for the promise to pay more

Answer 8

Williams v Roffey

Question 9

What are the Glidewell principles?

Answer 9

1- Contract for goods/ services in exchange for payment
2- B doubts whether A will perform his duties on time
3- B offers to pay more in exchange for A finishing on time
4- B obtains some extra benefit/ obviates a disbenefit
5- There is no economic duress

Question 10

General rule: Part payment is not good consideration for a promise to forego the balance

Answer 10

Foakes v Beer

Question 11

Exception: Part payment is good consideration if the debtor gives something different or pays early

Answer 11

Pinnel’s case

Question 12

If the promisor has, by words or conduct, promised to forego a legal right, the promisee will have a good defence if they have acted on this promise but the promisor brings a claim based on their action

Answer 12

Promissory estoppel (High Trees)

Question 13

When will Promissory Estoppel apply?

Answer 13

P- Promise to waive a legal right
R- Promisee relied on the promise (only need change of position, not detriment)
I- Inequitable for the promisor to go back on his word
D- Defence- shield, not sword
E- Effect = extinguish (suspend) legal right

Question 14

The promisor may resume their legal rights if they give reasonable notice

Answer 14

Tool Metal

Question 15

A promise to do something can be good consideration even if the promisor is already bound to do it in an agreement with a thrid party

Answer 15

Scotson v Pegg

Question 16

General Rule: Performance of public/ legal duties is not good consideration

Answer 16

Collins v Godefroy

Question 17

Exception: Performance of public/ legal duties is good consideration if not contrary to public policy and public duty is exceeded

Answer 17

Williams v Williams