L2 consideration and promissory estoppel

Question 1

what is consideration?

Answer 1

‘a valuable consideration, in the sense of the law, may consist either in some right, interest, profit, or benefit accruing to one party, or some forbearance, detriment, loss, or respinsibility, given, suffered, or undertaken by the other’

Question 2

example of consideration

Answer 2

When you buy a DVD recorder from a shop, the benefit you receive is the DVD recorder, and the detriment is the money you pay the shop.

Question 3

gratuitous promise

Answer 3

a promise given in exchange for nothing is a gratuitous promise and this is not binding except when contained in a deed

Question 4

gratuitous promise case example

Answer 4

Re Hudson (1885) - gratuitous promise is not a legal contract

Question 5

executory consideration

Answer 5

a promise made in return for a promise - where both parties are still to be performed

Question 6

executed consideration

Answer 6

occurs when one of the two parties has done all that they are reqiured to do, leaving any outstanding liability on the other party

Question 7

past consideration

Answer 7

past consideration is no consideration, consideration must be given in return for the promise

Question 8

case for past consideration

Answer 8

Roscorla v Thomas 1842

Question 9

past consideration example

Answer 9

past consideration (mary will drive bob to Manchester, conferring a benefit) - alleged contract formed (promise made, bob will pay mary £50) - enforcement (mary tried to sue bob for the £50, but she will fail)

Question 10

Past consideration exception - Pao on v Lauyiu Long

Answer 10

the three stage test -
1. that an act done ebfore the giving of a promise could be valid consideration for that promise if the act had been done at the promisers request
2. the parties had understood that the act was to be remunerated either by payment or by conferment of a benefit
3. the payment or conferant of benefit would have been enforceable had it been promised in advance

Question 11

earlier implied promise exception

Answer 11

Request ( bob (impliedly) that he would pay mary for driving him) - consideration (mary drives bob) - express promise (bob expressly promises to pay Mary £50, thereby fixing the amount to be paid in pursuance to the earlier understanding) - enforcement ( mary sues bob for £50, successfully)

Question 12

performance of existing duties

Answer 12

in general a promise to perform a public duty cannot be consideration however, if the promise is to do more then is required by law, this may well amount to consideration

Question 13

existing contractual duties owed to third parties

Answer 13

Shadwell v Shadwell 1860 - uncle to nephew - ‘marry and i will pay’ (breach or promise to marry actions existed then)

Question 14

obligation already owed

Answer 14

a promise to perform a contractual obligation already owed to the other party will not constitute good consideration

Question 15

the doctrine of promisory estoppel

Answer 15

1. the promisor made a promise
2. the promisor should have reasonably expected to induce the promisee to rely on the promise
3. the promisee actually relied on the promise and engaged in an action or forebearance of a right of a definite and substantial nature
4. injustice would be cuased if the promise were not enforced

Question 16

estoppel

Answer 16

estoppel restricts a person’s ability to ‘go back on’ a belief of assumption that they induced in another person. the doctrine has the effect of making some kinds of promises binding even where they are not supported by consdieration

Question 17

promissory estoppel

Answer 17

certain situations where a partyu to a contract promises something which is at variance with the original terms of contract and where the other party to the contract alters his/her behaviour in reliance of that promise. in such situations, english law will often prevent the former party from enforcing the original terms of the contract

Question 18

requirements for promissory estoppel

Answer 18

there must be an existing legal relationship between the parties whihc is being altered by the promissory estoppel

Question 19

requirements for promissory estoppel

Answer 19

there must be an existing legal relationship between the parties whihc is being altered by the promissory estoppel

Question 20

intention to create legal relations

Answer 20

it must be shown that the parties to the agreement intended legally bound by the agreement - it is an objective test based on what the reasonable person would have intended

Question 21

commercial agreements

Answer 21

in a business context - there is a presumption that parties intend to create legal relations and it should be easy to spot this as it will be a company or business trying to sell to either an individual or another company

Question 22

domestic arrangemnts

Answer 22

the law also presumes that where people make arrangements between family or friends then they do not wish to form a legal contract, and this should be easy to spot as there will be no companies or businesses involved or the persons are closely related

Question 23

summary

Answer 23

consideration must be executed or executary but not past
consideration must move from the promise though not necessarily to the promisor
consideration must be sufficient thought not necessarily accurate