Requirements For Formulations Of A Valid Contract Flashcards
Define consideration
The price paid for a persons promise
What’s a promisor and a promisee
Promisor person making promise
Promisee person who promise is made to
Is a promise legally binding
No, unless intent is proven of the promise
Dunlop pneumatic tyre co ltd v selfridge co ltd 1915
An act of forbearance of one party or the promise thereof is the price for which the promise of the other is bought and the promise thus given for value is enforceable
What is detriment
Relinquishment of legal right, benefit, something of value
What is consideration
Exchange of goods/money to consider
What is a bare gift?
When the giver provides money or gift for nothing in return
What is executed consideration
When a party performs their part of the contract when entering the contract
What is executors consideration
When parties exchange promises to do something in the future
When consideration is completed prior to promise being made what is this referred to?
Past consideration
Is part consideration a form of valid contract
No
What makes a valid consideration
Must move from the promise
Must not be in the past
Does not need to be accurate
Needs to be sufficient in information
Tweedle v Atkinson
Father of bride made a contact with father of groom. Father of the groom died, groom tried to sue father of bride. Did not succeed
Re Mcardle 1951
Child paid for work on Mother’s house. When mum died the brother and sister agreed to pay for work, then changed their mind. Child tried to sue and failed
Why did NVA management ltd v Obafemi Martins 2010 not suceed
As the wording of the contract was in the past tense
What is assumpsit
Promise by which someone assumes it undertakes an obligation to another person
What is the assumpsit doctrine
Lampleigh v braithwait
L killed someone then asked for B for a legal pardon for £100. B gave pardon and had to pay £100. Deemed enforceable although it was past consideration
PAO on v Lau Yiu Long 1989
Act was performed at the request of the promisor
It was understood between parties some reward could be expected
Later payment promise of deed or benefit was deemed lawful
Why did Chappell and Co v Nestle co ltd 1960 succeed
Because it is not for the court to determine the value of goods to funds, and consideration does not need to be accurate
What are the obligations of sufficient consideration
Needs to be legal
As long as the parties involved believe the promise had some economic value it is deemed sufficient and adequate
Give an example of when consideration is not applicable
If you’re performing within your duty. “Collins v godefroy 1831”
Case related to consideration of going about and beyond your duty
Gladbrook bros v Glamorgan county council
Gladbrook asked for extra policing on property. Which police did, and went above and beyond duty therefore consideration was valid
Case relating to existing contractual duties
Stilk v Myrick 1809
Paid more to complete a job on time - payee isn’t obliged to pay extra as worker should do the job on time if they are able
Contrary to Stilk v Myrick 1809
Williams v Rofey Bros 1990
Williams got into FD and needed extra money to complete building work which Rofey promised he would pay. Rofey didn’t paid, Williams sued and won.
Rofey lost as he would’ve gained a practical benefit for paying additional funds to cover building work
New agreement entered under ECONOMIC DURESS (threat of late payment penalty)
MWB business Exchange Centres Ltd v Rock Advertising Ltd 2016
Rent arrears, rock said to pay £3500 upfront then remaining arrears over 1 year
Court decided MWB benefited from upfront payment and that there would be a paying resident in the property instead of it remaining vacant.
Repayment of debt and lack of consideration
Pinnells case
D and C builders v Rees 1966
Settlement reached for £300 of £482 owed
Defendant was ordered to pay remaining £182 as claimant has no consideration on offer
Acceptions to paying less than a debt owed
Offer lower accepted in full and final settlement
Debtor is within a composition agreement (IVA)
If amount owed in contract is in dispute
Amount owed is not a final amount and final sum is then calculated “unliquidated amount”
What are third party rights to an existing contract
In Scotson v Pegg 1862
Pegg is the third party
He was entitled to rights within a contract Scotson had with another party as the delivery of goods were to go to Pegg as part of original contact with Scotson had with the other party
Balfour v Balfour
Husband promised to pay his wife whilst he was living away from home. Said will pay £30pm. Wife sued husband when payments stopped.
Court dismissed the claim due to the domestic relationship
If a relationship is broken down, divorce etc. Any agreement will be treated as legally binding. Merritt v Merritt
Parker v Clark’s
Parker sold his house. He moved in with the Clarke’s. Clarke’s and Parker’s agreed to share the household bills. Clark then disliked Parker and changed the will of the house to get Parker out of the shared home.
Example of disadvantaging yourself means you’re aware contract is legally binding
Simpson’s v Pays
Grandma, granddaughter and lodger entered into a competition agreed to split winnings. Grandma won and refused to split winnings. Court agreed lodger is entitled to their cut and awarded damages
What is an honour clause
It prevents an agreement being enforceable
Example of honour clause
Rose and frank v Brompton bros
What is a letter of comfort
A letter to support a sale but sender is not legally bound by the letter as it is not an offer or a contract
Consideration by Law must be?
Equal value to the thing given in exchange of
What is given in exchange for the promise must be recognised by law
What is a mere puff
Extravagant claims not intended to be legally binding
Case which contradicts The Brickbon case in relation to email service of acceptance
Thomas v BPE
