Formation - Consideration

Question 1

What is consideration?

Answer 1

An act by one party in exchange for the promise of an act by the other party

Question 2

What is executory consideration?

Answer 2

There is an exchange of promises to perform acts in the future - bilateral contract

Question 3

What is executed consideration?

Answer 3

One party performs an act in fulfilment of a promise made by the other - Unilateral contract

Question 4

What are the 5 conditions that consideration must meet?

Answer 4

1. Consideration must not be past
2. Consideration must move from the promisee
3. Consideration need not be adequate (fair value)
4. Consideration cannot be an existing duty
5. Consideration cannot be part payment of a debt

Question 5

What is the POL from Re McArdle?

Answer 5

The wife’s consideration came before they signed the agreement so was past - past consideration = no consideration

Question 6

What is the exception from past consideration = no consideration?

Answer 6

If the service is performed at D’s request and when both parties understand that payment is expected, then this can be enforced

Question 7

What is the POL from Lampleigh vs Braithwaite?

Answer 7

The service had been requested and both parties would have considered payment so he could sue

Question 8

What is the POL from Stewart vs Casey?

Answer 8

Past consideration was good consideration

Question 9

What is the POL from Tweddle vs Atkinson?

Answer 9

Only a person who has provided consideration in return for a promise may enforce that promise as a contract

Question 10

What is the POL from Chappell vs Nestle?

Answer 10

Nestle offered a record at 20% of the price plus 3 chocolate wrappers (which they then threw away) - good consideration

Question 11

What must consideration have?

Answer 11

Economic value

Question 12

What is the POL from Ward vs Byham?

Answer 12

The promise was beyond normal duty by law so it was good consideration

Question 13

What is the POL from Halmer vs Sidmay?

Answer 13

Giving something up can be consideration

Question 14

What is the POL from White vs Bluett?

Answer 14

Consideration must have real value

Question 15

What is the POL from Collins vs Godefroy?

Answer 15

Performance of an existing duty is not consideration - Police officer had to attend court as part of job, defendant offered to pay him to attend but this is not enforaceable

Question 16

What is the POL from Glasbrook Bros vs Glamorgan?

Answer 16

Only if the consideration exceeds the duty may it be considered

Question 17

What is the POL from Stilk vs Myrick?

Answer 17

Performance of an existing contractural duty is not sufficient as there is no new consideration

Question 18

What is the POL from Hartley vs Ponsonby?

Answer 18

Crew undertook greater work, so good consideration for extra pay

Question 19

What is the POL from Williams vs Roffey?

Answer 19

Bonus was enforcable as avoiding the penalty clause was held to be consideration - avoiding a detrement is good consideration

Question 20

What is the POL from Shadwell vs Shadwell?

Answer 20

Existing contractual duty owed to a third party is sufficient for consideration

Question 21

What is the POL from Pinnel’s 1602?

Answer 21

Part payment of a debt is not good consideration for a promise to get rid of the remaining balance

Question 22

What is the POL from DC Builders vs Rees?

Answer 22

Reluctantly accepted £300 of £482 in full satisfaction of the debt. No consideration and accepted under pressure so can sue for balance

Question 23

What case confirmed Pinnel?

Answer 23

Foakes vs Beer

Question 24

What is the POL from Foakes vs Beer?

Answer 24

Mrs Beer demands interest off of a debt payment and won as there was no consideration for earlier agreement - harsh but in line with Pinnel’s case