Rules of Consideration

Question 1

what are examples of performing a pre-existing duty (something you are already legally required to do) cannot be consideration for a new contract

Answer 1

duty imposed under a public duty to act (eg. police carrying out their duties)
duty imposed under an existing contract with the promiser (eg. an employment contract)
a promise to make payment of an already existing debt (eg. repaying a loan)

Question 2

Collins v Godefroy

Answer 2

a policeman ordered to give evidence at trial, D promised money to ensure they gave evidence but the policeman was doing his public duty already.
principle: performing an act that one is already legally obligated to do cannot serve as valid consideration for a contract.

Question 3

Williams v Roffey Bros and Nicholls Ltd

Answer 3

facts: Roffey promised extra payment to a subcontractor to ensure timely completion.
held: that this promise was enforceable because Roffey received a practical benefit
principle: “practical benefit” doctrine: allows promises tied to existing contractual obligations to be enforceable if they provide practical advantages to the promisor.

Question 4

another rule of consideration

Answer 4

a promise to accept part payment of an existing debt in place of the whole debt is not consideration.

Question 5

accord and satisfaction

Answer 5

accepting something other than money for the whole debt is good consideration but must be done on creditors request

Question 6

promissory estoppel

Answer 6

if A agrees to vary the contract, B relies on it, A is ‘estopped’ from going back on their word

Question 7

promissory estoppel: Central London Property Trust Ltd v. High Trees House Ltd

Answer 7

facts: During WWII, the owner agreed to accept half rent from the lessee. After the war, both parties relied on this.
held: the owner was entitled to full rent again, establishing promissory estoppel.
principle: promissory estoppel prevents a party from going back on their promise if the other party has relied on it to their detriment.

Question 8

DC Builders v Rees (promissory estoppel is an equitable principle so anyone relying on it must show they behaved equitably)

Answer 8

facts: a builder completed work for a client who then refused to pay the full amount, claiming financial duress.
held: the client’s actions amounted to economic duress and the contract was upheld.
principle: economic duress cannot invalidate a contract if the party alleging duress has a reasonable alternative.

Question 9

what is privity?

Answer 9

contracts cannot confer rights or obligations on someone who is not a party to a contract

Question 10

Dunlop Pneumatic Tyre Co v Selfridge

Answer 10

if A and B have a contract, C cannot claim rights or have obligations imposed on them.