CONTRACT LAW - Consideration, ICLR & capacity - KEY PRINCIPLES Flashcards
What is executory consideration? (1)
Where contracting parties make promises to each other to perform something in the future after the contract has been formed.
What is executed consideration? (1)
It is where, at the time of the formation of the contract the consideration has already been performed.
What must consideration be? (4)
Consideration must not be past. It must not move from the promisee. It must not be adequate. It must be sufficient.
What does the case of EASTWOOD V KENYON 1840 demonstrate. (6)
Consideration must not be past.
A father died leaving his daughter Sarah in the care of a guardian, Eastwood, who borrowed £140 to help pay for Sarah’s upbringing.
When she came of age, Sarah married Kenyon, who promised to pay off debt and repay Eastwood for having brought up Sarah.
Kenyon then failed to honour his promise.
It was held that consideration provided by Eastwood was not good consideration to support Kenyon’s subsequent promise to discharge the debt because it was in the past.
It was held that the moral obligation to fulfil such a promise was insufficient to create a legally binding contract.
When does an exception to the past consideration apply? (2)
When some prior act or service was provided by the promisee at the promiser’s request and it was always understood that the payment would be made for that act or service.
What are the three conditions for the past consideration? (3)
The act must have been done at the promiser’s request.
The parties must have understood that the act was to be rewarded either by a payment or the conferment of some other benefit.
The payment or conferment of other benefits must have been legally enforceable as it been promised in advance.
What does consideration must move from the promisee mean? (1)
That a party who has not provided consideration may not bring an action to enforce a contract.
What does the case of TWEDDLE V ATKINSON 1861? (3)
Consideration must move from the promisee.
The two fathers of a couple who were about to get married reach an agreement that the father of the bride was to pay £200 and the father of the groom was to pay £100 to the bridegroom, William Tweddle, the claimant.
The groom sought to enforce his father-in-law’s promise, but it was held that he could not as he provided no consideration for the promise - the consideration had been provided by the fathers.
What does the doctrine of privity of contract state? (1)
Only a person who is a party to a contract may sue or be sued on that contract.
What does the doctrine of freedom of contract state? (2)
The courts will not interfere with a bargain freely reached by the parties and it is not the courts duty to assess the relative value of each party’s contribution to the contract.
What does the case of CHAPPELL V NESTLE CO LTD demonstrate? (3)
Nestle offered gramophone records of a particular tune to the public for 1s 6d together with three chocolate bar wrappers.
The wrappers were thrown away on receipt by the company.
The house of lords held that the wrappers were part of the consideration even though they were of no further value once received by the company.
What does consideration must have some value in the eyes of the law mean? (1)
It matters not how small that value and if a thing of value can be identified then there will be sufficiency of consideration and the court will not enquire as to its adequacy.
What does the case of THOMAS V THOMAS 1842 demonstrate? (2)
The executor of an estate agreed to transfer a house to the deceased widow’s in return for a payment from the widow of £1 per annum towards the ground rent for the property and the widow’s agreement to keep the house in repair.
The court made clear that it did not matter whether the widow’s obligation in any way matched the value of the property.
