Lecture 4-Consideration Flashcards
Consideration
Currie v Misa (1875)
Something of value/worth being linked to the exchange of promises
Considerations
1.Value
2.Past Consideration
3.Performance of a pre-existing obligation
Value
The consideration must amount to value
The consideration must be sufficient but need not be adequate.
The value that consideration must possess is ‘value in the eye of the law’, not in the eye of the parties.
Case Authority
CHAPPELL V NESTLE [1960]
Nominal value is sufficient
Benefit and Detriment
Courts ask whether what was provided by the promisee constitutes a ‘benefit’ to the promisor, or a ‘detriment’ to the promisee
Lancelot Shadwell v Cayley Shadwell and another (1860)
Legal and Factual
The legal detriment comes from his having consented to doing something he was not legally bound to do. In legal terms, any restriction on your personal freedom is a detriment, even if the factual consequences of that restriction are to your benefit.
In contrast, the inverse situation, where the benefit or detriment is purely factual and not legal, has proven more problematic, as White v Bluett illustrates.
A promise to abstain from doing what he had no right to do could not be consideration.
Past Consideration
RE MCARDLE [1951]
The act for which the promise has been given (me giving him the car) happened BEFORE his promise.
Exceptions
Pau On v Lau Yiu Long
The act must have been done at the promisors’ request:
the parties must have understood that the act was to be remunerated either by a payment or the conferment of some other benefit:
and payment, or the conferment of a benefit, must have been legally enforceable had it been promised in advance
Re Casey’s Patents, Stewart v Casey [1892]
PITTS V JONES [2007]
What matters is the actual nature of what is given, not the parties’ motives in giving or receiving it. This is sometimes referred to as the court ‘inventing’ or ‘refusing to invent’ consideration, but in reality it simply reflects the fact that consideration, like formation, is judged objectively, not subjectively.
Consideration must
1.move from the promisee
Crow v Rogers
2.be in respect of the promise
Combe v Combe
Third party
Tweddle v Atkinson (1891)
Price v Easton (1833)
If it is provided by a third party (someone outside the agreement), then it will not constitute consideration.
Peppercorn consideration
Peppercorn consideration (artificial-nominal value to create a sufficient agreement for a ‘gratuitous promise’) offers a powerful tool to make enforceable agreements which would otherwise have been unenforceable for want of consideration.
Performance of existing obligation
1.Performance of a non-contractual duty (public duty)
2.Performance of a contractual duty owed to a third party
3.Performance of a contractual obligation already owed to the promisor
Public Duty
Collins v Godefroy (1831)
A promise to pay a witness who was already under a legal duty to attend court to provide evidence lacked consideration. No benefit or detriment arose in relation to the proposed payment
Exceeding public duty
Glasbrook Bros Ltd v Glamorgan CC [1925]
Thus a distinction was clearly drawn between the police (i) performing their duty of doing what is necessary to prevent crime and provide protection (for which they cannot make a charge) and (ii) doing something else at the request of an individual (for which they can charge)