Element 3 - Consideration

Question 1

What is consideration?

Answer 1

One party promises to do something (or not do something) and another party promises to do something in return

Question 2

What is the difference between executed and executory consideration?

Answer 2

Executory = something promised in future
Executed = performance of the consideration

Question 3

Explain the rule that consideration must move from the promisee?

Answer 3

Consideration must be provided by parties themselves and NOT A THIRD PARTY

Question 4

Can a party who has not provided consideration enforce a contract?

Answer 4

No, unless the contract is executed as a deed

Question 5

What rights does the Contracts, Rights of Third Parties Act give a third party?

Answer 5

The right to enforce a contract if they are named in it and the term can be enforced to their benefit

Question 6

Must consideration be adequate or sufficient and what is the difference?

Answer 6

Sufficient - must have some value, even if small. Adequate speaks to the actual value against what is promised

Question 7

Can a lack of adequate consideration be a factor which renders a contract void or voidable?

Answer 7

Yes, it is evidence of a vitiating factor of mistake or duress

Question 8

What is illusory consideration?

Answer 8

Consideration that has no value, illusion, which will not be considered sufficient

Question 9

Is performance of an existing contractual duty sufficient consideration?

Answer 9

No

Question 10

When is performance of an existing contractual duty sufficient consideration?

Answer 10

1. When the promise is given in return for work which goes beyond the original obligation, creating a new contract
2. When the performance of the existing duty confers practical benefit on the party offering additional consideration (for example, to avoid a penalty for late finishing of work)

Question 11

If I am a driver for Arthur Cox driving to Limerick, and a pedestrian promises to pay me 100 buck to drive him to Limerick, is that enforceable?

Answer 11

Yes, performance of an existing duty owed to a third party is sufficient consideration

Question 12

Is performance of an existing statutory duty sufficient consideration?

Answer 12

No

Question 13

Is a promise to pay you for doing something before i made the promise enforceable

Answer 13

No

Question 14

What is the exception to the rule that a promise to pay me for something I did prior to you making that promise is not enforceable?

Answer 14

There was an implied understanding that payment would follow

Question 15

What are the three elements needed for the “implied understanding of payment” exception to apply to past consideration?

Answer 15

1. Act must be done at promisors request
2. Parties both understand that the act must be remunerated
3. Payment must be legally enforceable if the promise was made in advance

Question 16

Is part payment of a debt sufficient consideration, for example, if I owe 450 bucks and the lender agrees to settle at 400, can he still sue me for 50?

Answer 16

Part payment is not sufficient and you can be sued for the last fiddy

Question 17

What are the exceptions to the rule that part payment of a debt is not sufficient consideration?

Answer 17

1. Debt is disputed in good faith
2. Unliquidated claims (uncertain amount)
3. Payment at a different place/earlier payment (lesser amount but gets paid earlier)
4. Third party makes the payment
5. Payment by different means (like a car instead of cash)
6. Composition with creditors (agreement with all creditors

Question 18

What is promissory estoppel?

Answer 18

Makes a contract without consideration enforceable without consideration

Question 19

How does promissory estoppel work

Answer 19

Estopps someone from going back on a promise as a SHIELD, not SWORD (defence, not basis of claim) as follows:

1. clear and unequivocal promise by promisor to not rely on existing legal right (like accepting lower amount than the agreed price)
2. Promisee must alter their position in reliance on the promise
3. Must be inequitable for promisor to go back on promise

Question 20

Is Estoppell permanent?

Answer 20

No it is suspensory