formation- consideration Flashcards
what is consideration
what one party gives (or promises to give) in exchange for the other party’s performance
3 steps for consideration
- must be sufficient but need not be adequate
- must not be in the past
- performing existing duty is not good consideration
what case defines consideration
Dunlop v Selfridge
what does it must be sufficient mean
- sufficient means what is promised must be real and of some value
- need not be adequate means it need not be real or the market value
case for must be sufficient
Chappell & Co v Nestle
Chappell & Co v Nestle facts
- offered music records in return for used sweet wrappers
- wrappers were sufficient consideration even tho it was not of same value
case for what was not sufficient
White v Bluett
White v Bluett facts
- son owed father money
- father promised not to enforce debt if son promised not to complain
- father died and son was sued for money
- son’s promise was too vague and lacked value
- was not sufficient as he had no legal right to complain
what is past consideration
- consideration must not be in the past
- must not be something that was already done
what if a promise or payment has already been carried out
it was a gift
case for past consideration
Re McArdle
Re McArdle facts
- 5 children inherited their mothers house
- one son paid for repairs and improvements, the other sons agreed to contribute
- consideration was past as the work had been done before the promise was made
- promise to contribute towards the costs was not a valid contract
exception for past consideration
if one party acted at the other’s request and it was understood all along that payment would be made later, then past consideration will be valid
case for past consideration exception
Lampleigh v Braithwaite
Lampleigh v Braithwaite facts
-sentenced to death, asked friend to speak to king to get him a pardon
-promised to pay him but did not
-promise came after performed service
-good consideration as actions taken as his request and were so important
-fee must have been implied
what is performing an existing duty
if you promise to do something you already have to do it is not good consideration as you are obliged to do it anyways
case for performing an existing duty
Stilk v Myrick
Stilk v Myrick facts
- during a voyage 2 sailors deserted their ship and the captain promised those remaining extra wages
- captain then refused to pay them
- promise was not binding
- no consideration given in return for promise of extra pay as the sailors were under a contractual duty to sail ship home anyway
case for not performing existing duty
Hartley v Ponsonby
Hartley v Ponsonby facts
- over half crew deserted
- extra wages offered
- sailors were owed the extra wages as the remaining sailors had gone beyond their contractual duty
- undertaking dangerous voyage
case where they did not perform existing duty, it was for payer’s benefit
Williams v Roffey
Williams v Roffey facts
- firm of builders hired W to do carpentry work
- W were in financial difficulties so R offered more money to get work completed so avoid payment of a penalty
- when work was completed, R refused to pay
- W was owed extra money as R freely chose to offer them more money and had gained a benefit by avoiding the delay and paying payments
exception to performing an existing duty
promise to perform contractual duty owed to a 3rd party is good consideration:
if one party to a contract provides a benefit to 3rd party they are already bound to provide under the contract- this can be good consideration
case for exception to performing existing duty
Scotson v Pegg
