Term
| What is the classical C19th definition of 'consideration'? |
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Definition
| Currie v Misa - 'a valuable consideration, may consist either in some right, interest, profit, or benefit accruing to the one party, or some forbearance, detriment, loss or responsibility given, suffered, or undertaken by another |
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Term
| When defining consideration, what authority should you use? |
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Definition
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Term
| Pollock's definition of consideration |
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Definition
| an act or forbearance of one part, or the promise thereof, is the price for which the promise of the other is bought, and thus the promise thus given for value is enforceable |
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Term
| What is the leading case on consideration? |
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Definition
| Dunlop v Selfridge [1915] |
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Term
| In Dunlop v Selfridge [1915], what definition of 'consideration' is used? |
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Definition
| Pollock's definition - an act or forbearance of one part, or the promise thereof, is the price for which the promise of the other is bought, and thus the promise thus given for value is enforceable |
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Term
| What are the two types of consideration? |
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Definition
Executory consideration
Executed consideration |
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Term
| What is executory consideration? |
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Definition
| Where the contracting parties make promises to each other to perform something in the future after the contract has been formed. e.g. a contract for the sale of goods, where the seller promises to deliver the goods, and the buyer promises to pay for the goods on receipt, or by some other credit arrangement |
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Term
| What is executed consideration? |
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Definition
| Where, at the time of the formation of the contract, the consideration has already been performed. e.g. in a unilateral contract, where a promise of reward is made and the price paid is the act of performance required by the offer. The required act is both the acceptance of the offer (and thus the time when the contract is formed) and executed consideration |
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Term
| What are the four key general rules governing consideration? |
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Definition
1) Consideration must not be past
2) Considerations must move from the promisee
3) Consideration need not be adequate
4) Consideration must be sufficient |
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Term
| What does 'consideration must not be past' mean? |
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Definition
An act/forebearance performed prior to the contract agreement CANNOT (generally) be used as consideration
Consideration must be given in RETURN for the promise |
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Term
| What the the leading cases on 'consideration must not be past'? |
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Definition
Eastwood v Kenyon [1840]
Roscorla v Thomas [1842] |
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Term
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Definition
CONSIDERATION MUST NOT BE PAST
C had raised a young girl & spent £140 doing so
the girl married D, and D promised to pay off the debt incurred by C
D did not honour his promise
HELD - The consideration provided by the C (raising the girl) was not sufficient consideration for the D's subsequent promise, as raising the girl had occured BEFORE the promise was made |
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Term
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Definition
CONSIDERATION MUST NOT BE PAST
C brought D's horse for £30
After D had purchased the horse, the C promised him that the horse was free from vice
The horse was actually diseased
HELD - there was no consideration to support the D's promise. The sale itself could not be valuable consideration as it was completed prior to the promise being given. |
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Term
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Definition
CONSIDERATION MUST NOT BE PAST
C brought D's horse for £30
After D had purchased the horse, the C promised him that the horse was free from vice
The horse was actually diseased
HELD - there was no consideration to support the D's promise. The sale itself could not be valuable consideration as it was completed prior to the promise being given. |
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Term
| What is the exception to the rule that 'consideration cannot be past'? |
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Definition
| Where the past consideration was provided at the promisor's request and it was understood that payment would be made |
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Term
| What is the exception to the rule that 'consideration cannot be past'? |
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Definition
| Where the past consideration was provided at the promisor's request and it was understood that payment would be made |
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Term
| Which case introduced the exception the rule that 'consieration cannot be past'? |
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Definition
| Lampleigh v Braithwait [1615] |
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Term
| Which case introduced the exception the rule that 'consieration cannot be past'? |
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Definition
| Lampleigh v Braithwait [1615] |
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Term
| Lampleigh v Braithwait [1615] |
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Definition
D had murdered a man
D asked the C to intercede with the king to obtain a pardon for his crime
C did so, at much expense and effort to him
D then promised to pay him £100
HELD - the act of the C was good consideration as he had acted on the request of the D (+ I guess implied understanding of payment) |
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Term
| Lampleigh v Braithwait [1615] |
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Definition
D had murdered a man
D asked the C to intercede with the king to obtain a pardon for his crime
C did so, at much expense and effort to him
D then promised to pay him £100
HELD - the act of the C was good consideration as he had acted on the request of the D (+ I guess implied understanding of payment) |
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Term
| Re Casey's Patents [1892] |
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Definition
EXCEPTION TO THE RULE THAT CONSIDERATION CANNOT BE PAST, PROVIDED THAT THE ACT IS PERFORMED ON OFFEROR'S REQUEST AND THERE IS AN UNDERSTANDING THAT PAYMENT WILL BE MADE
THIS UNDERSTANDING CAN BE IMPLIED
HELD - offeror requested act + there was implied understanding (from previous undertakings between the parties) that payment would be made, because the C had previously done paid work for the D. |
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Term
| Which case laid out the three necessary conditions which must be met in order for past consideration to be sufficient? |
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Definition
| Pao On v Lau Yiu Long [1980] |
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Term
| Pao On v Lau Yiu Long [1980] (on consideration can be in the past) |
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Definition
SET OUT THEREE CONDITIONS WHICH MUST BE MET IN ORDER FOR PAST CONSIDERATION TO BE SUFFICIENT
1) The act must have been done at the promisor/offeror's request
2) The parties musthave understood that the act was to be rewarded in some way
3) The payment, or conferrment of other benefits, must have been legally enforceable had it been promised in advance |
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Term
| Give some everyday modern examples of consideration being in the past... |
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Definition
1) when you leave your car in the garage, the ultimate price will be determined after the completion of the repairs... = service performed before demand for renumeration
2) Using a solicitor... you are presented with a bill after the work is complete... |
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Term
| What does 'consideration must move from the promisee' mean? |
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Definition
It basically means that a party who has not provided consideration may not bring an action to enforce a contract
Promisee = person to whom the promise is made. Therefore, the promisee MUST also provide some consideration in order to enforce the promise |
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Term
| What concept is similar to the doctrine that 'consideration must more from the promisee'?? |
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Definition
| Privity of contract (where only parties to a contract can sue)... however, there is a slight difference between the two concepts... e.g. if you are party to a contract but fail to provide consideration, the other party can sue you for breach (whilst you can sue for nothing). Whereas, if you are not party to a contract, you cannot sue, nor can you be sued. |
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Term
| What does 'consideration need not be adequate' mean? |
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Definition
It is not part of the court's duty to assess the relative value of each party's contribution to the bargain
Once it is established taht a bargain was freely reached, it will be presumed that each party stipulated according to his wishes and intentions at the time. |
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Term
| Which case can be used to prove the doctrine that 'consideration need not be adequate'? |
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Definition
| Chappell & Co. v Nestle Co. Ltd [1960] |
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Term
| Chappell & Co. v Nestle Co. Ltd[1960] |
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Definition
CONSIDERATION NEED NOT BE ADEQUATE
C's owned royalties to a record
D offered a promotion, whereby customers would get the record in return for 3 sweet wrappers
In order to settle a dispute over loyalties due, the court had to decide whether the sweet wrappers were suifficent consideration
HELD - the wrappers were part of the consideration (received by the D from customers) even though they were of no further value once received by the D |
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Term
| What does 'consideration need not be adequate' mean? |
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Definition
It is not part of the court's duty to assess the relatibe value of each party's contribution to the bargain
Once it is established taht a bargain was freely reached, it will be presumed that each party stipulated according to his wishes and intentions at the time. |
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Term
| Which case can be used to prove the doctrine that 'consideration need not be adequate'? |
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Definition
| Chappell & Co. v Nestle Co. Ltd [1960] |
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Term
| Chappell & Co. v Nestle Co. Ltd[1960] |
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Definition
CONSIDERATION NEED NOT BE ADEQUATE
C's owned royalties to a record
D offered a promotion, whereby customers would get the record in return for 3 sweet wrappers
In order to settle a dispute over loyalties due, the court had to decide whether the sweet wrappers were suifficent consideration
HELD - the wrappers were part of the consideration even though they were of no further value once received by the D |
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Term
| What is the famous quote that comes from Chappell & Co. v Nestle Co. Ltd [1960] |
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Definition
| 'A contracting party can stipulate for whatever consideration he chooses. A peppercorn does not cease to be good consideration if it is established that the promisee does not like pepper and will throw away the corn' |
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Term
| What does 'consideration must be sufficient' mean? |
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Definition
| Consideration must have some value in the eyes of the law. |
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Term
| How do the two doctrines - 'consideration need not be adequate' and 'consideration must be sufficient' - co-exist? |
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Definition
It matters not how small the value is, so long as it is worth something.
If a thing of value can be identified, then there will be sufficiency of consideration, the court will not enquire as to its adequacy. (e.g. a peppercorn could be sufficient consideration in a contract for the purchase of a car) |
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Term
| What are the three cases to compare when considering the doctrine 'consideration must be sufficient'? |
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Definition
White v Bleutt [1853]
Hamer v Sidaway [1891]
Arrale v Costain [1976] |
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Term
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Definition
CONSIDERATION MUST BE SUFFICIENT
MUST HAVE VALUE IN THE EYES OF THE LAW
C's father had promised to pay him money if the son stopped complaining about how the father spent his money
C stopped complaining
Father died
C sued father's executor's for the money
HELD - there was no consideration from the son for the father's promise.
It was the father's right to spend his money how he pleased, his son had no legal right to complain about the distribution.
The son was therefore giving nothing up by agreeing not to complain (Nothing of any value in the eyes of the law) |
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Term
| Hamer v Sidaway [1891] AMERICAN CASE |
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Definition
CONSIDERATION MUST BE SUFFICIENT
CEASING AN ACTIVITY CAN BE SUFFICIENT CONSIDERATION
Uncle agreed to pay C money if he stopped smoking, drinking and swearing
C stopped all of the above
C sued uncle's executors for the money
HELD - there was sufficient consideration as the C had stopped doing something that he was legally entitled to do. |
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Term
| Arrale v Costain Civil Engineering Ltd [1976] |
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Definition
| WHERE AN INDIVIDUAL PROMISES TO RESIST A COURSE OF ACTION WHICH HE NEVER INTENDED TO PURSUE, NO CONSIDERATION WILL STEM FROM THE PROMISE TO RESIST THE COURSE OF ACTION |
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Term
| What are the three cases to compare when considering the doctrine 'consideration must be sufficient'? |
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Definition
White v Bleutt [1853]
Hamer v Sidaway [1891]
Arrale v Costain [1976] |
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Term
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Definition
CONSIDERATION MUST BE SUFFICIENT
MUST HAVE VALUE IN THE EYES OF THE LAW
C's father had promised to pay him money if the son stopped complaining about how the father spent his money
C stopped complaining
Father died
C sued father's executor's for the money
HELD - there was no consideration from the son for the father's promise.
It was the father's right to spend his money how he pleased, his son had no legal right to complain about the distribution.
The son was therefore giving nothing up by agreeing not to complain (Nothing of any value in the eyes of the law) |
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Term
| Hamer v Sidaway [1891] AMERICAN CASE |
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Definition
CONSIDERATION MUST BE SUFFICIENT
CEASING AN ACTIVITY CAN BE SUFFICIENT CONSIDERATION
Uncle agreed to pay C money if he stopped smiking, drinking and swearing
C stopped all of the above
C sued uncle's executors for the money
HELD - there was sufficient consideration as the C had stopped doing something that he was legally entitled to do. |
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Term
| Arrale v Costain Civil Engineering Ltd [1976] |
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Definition
| WHERE AN INDIVIDUAL PROMISES TO RESIST A COURSE OF ACTION WHICH HE NEVER INTENDED TO PURSUE, NO CONSIDERATION WILL STEM FROM THE PROMISE TO RESIST THE COURSE OF ACTION |
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Term
| Can an existing obligation be good consideration? |
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Definition
| Yes - in certain circumstances |
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Term
| In what circumstances can an existing obligation be good consideration? |
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Definition
1) WHERE A PARTY SEEMS UNLIKELY TO BE ABLE TO COMPLETE A TASK, AND THE OTHER PARTY OFFERS ADDITIONAL MONEY - WITHOUT DURESS, AND WHERE THE OTHER PARTY GAINS SOME PRACTICAL BENEFIT FROM ENCOURAGING THE FIRST PARTY TO COMPLETE THE TASK.
2) WHERE A PARTY, IN COMPLETING A TASK, PERFORMS SOMETHING IN EXCESS OF WHAT THEY WERE CONTRACTUALLY BOUND TO DO |
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Term
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Definition
WHERE A PARTY'S CONTRACT OBLIGES THEM TO PERFORM A CERTAIN ACT, PERFORMING THIS ACT CANNOT COUNT AS ADDITIONAL CONSIDERATION FOR A FURTHER PROMISE
D = captain of a ship
C = seamen
two seamen abandoned the ship
the D promised the C that if they completed the additional work of the two abandonees, the D would give the C extra money
However, the Cs were already contractually bound to do any extra work to complete the voyage
HELD - as the C were already contractually bound to do any extra work, performing the extra work could not count as fresh consideration |
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Term
| What is the policy reason behind Stilk v Myrick [1809] |
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Definition
As, if they had been legally entitled to the extra money - despite being contractually bound to perform the extra work, this would pave the way for blackmail, extortion and duress - whereby people could refuse to work unless they are paid in excess of what their contract provides (especially an issue when on a ship)
Also, this undermines the rule that you can't pay extra without fresh consideration. |
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Term
| What is a good case to compare with Stilk v Myrick [1809]? |
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Definition
| Hartley v Ponsonby [1857] |
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Term
| Hartley v Ponsonby [1857] |
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Definition
WHERE A PARTY PROVIDES ADDITIONAL 'CONSIDERATION' OUTSIDE OF WHAT THEY ARE CONTRACTED TO TO, THIS CAN COUNT AS FRESH CONSIDERATION
Cs = seamen
D = captain
the ships crew had considerably depleted
D offered C extra money to complete the voyage
the Cs were not contractually bound to perform the additional duties
HELD - the Cs work counted as fresh consideration, and thus they were entitled to the additional money |
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Term
| What is a good case to compare with Stilk v Myrick [1809]? |
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Definition
| Hartley v Ponsonby [1857] |
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Term
| Hartley v Ponsonby [1857] |
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Definition
WHERE A PARTY PROVIDES ADDITIONAL 'CONSIDERATION' OUTSIDE OF WHAT THEY ARE CONTRACTED TO TO, THIS CAN COUNT AS FRESH CONSIDERATION
Cs = seamen
D = captain
the ships crew had considerably depleted
D offered C extra money to complete the voyage
the Cs were not contractually bound to perform the additional duties
HELD - the Cs work counted as fresh consideration, and thus they were entitled to the additional money |
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Term
| What case could possibly be identified as a possible abandonment of the principle in Stilk v Myrick [1809]? |
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Definition
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Term
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Definition
GENUINE RENEGOTIATIONS, WHICH RESULT IN A PARTY PERFORMING WHAT HE WAS ALREADY BOUND TO DO, CAN = FRESH CONSIDERATION
IN WILLIAMS V ROFFEY, ROFFEY APPROACHED WILLIAMS OF THEIR OWN ACCORD AND OFFERED THEM EXTRA MONEY.
WHERE A PARTY SEEMS UNLIKELY TO BE ABLE TO COMPLETE A TASK, AND THE OTHER PARTY OFFERS ADDITIONAL MONEY - WITHOUT DURESS, AND WHERE THE OTHER PARTY GAINS SOME PRACTICAL BENEFIT FROM ENCOURAGING THE FIRST PARTY TO COMPLETE THE TASK.
IN THIS CASE, ROFFEY (PAYEE) APPROACHED WILLIAMS AND OFFERED THE EXTRA MONEY, THEREFORE = NO ED
C's = builders
D = contractors
D had contracted C to build 27 flats
After completing 9 of the flats, C found himself in financial difficulties
The D was worried that the C wouldn't complete the job, and then the D would be fined by his bosses
So the D offered to pay the C an additional sum of money per completed flat + changed the working arrangements to speed up the completion of each flat
C completed 8 more flats
D refused to pay the additional money, arguing that the C had done no more than he was already bound to do
HELD - as a result of his promise to pay extra money, the D had obtained certain practical benefits, therefore, there was consideration for the D's promise to pay more. |
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Term
| Will performing a public duty, as imposed by the law, be sufficient consideration? |
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Definition
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Term
| Which case can be used to confirm the rule that 'carrying out a public duty, as imposed by the law, will not be sufficient consideration? |
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Definition
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Term
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Definition
PERFORMING A PUBLIC DUTY, AS IMPOSED BY THE LAW, WILL NOT BE SUFFICIENT CONSIDERATION
C had been supoenad as a witness in court
C tried to claim £1 per day as a fee
HELD - the duty to attend was a duty imposed by law. Therefore, there was no consideration. |
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Term
| Can police officers claim rewards for giving information? (is there consideration - or are they just performing their duty, as imposed by the law?) |
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Definition
| YES, they can claim a reward, there is sufficient consideration. |
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Term
| Which case confirms that a police officer, in providing information on a criminal, has provided sufficient consideration to claim a reward? |
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Definition
England v Davidson [1840]
(also see Gibbons v Proctor [1891]) |
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Term
| England v Davidson [1840] |
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Definition
IF A POLICE OFFICER PROVIDES INFORMATION LEADING TO AN ARREST, THIS IS SUFFICIENT CONSIDERATION TO ENABLE TO OFFICER TO CLAIM A REWARD
D had offered a reward for information leading to the conviction of a particular criminal
C (a police officer) provided the relevant information
D refused to pay C the reward as, he argued, the C was simply performing his duty
HELD - the duty of a police officer is the prevention of crime - police officers are not under a duty to provide information. Therefore, the C had provided sufficient consideration. |
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Term
| What are two examples of cases in which the courts have been fairly libearal in their application of consideration principles - more focused on moral public policy, than determined on a strict analysis of the sufficiency of consideration? |
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Definition
Harris v Sheffield United FC [1988]
Ward v Byham [1956] |
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Term
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Definition
THE COURTS MAY BE MORE INFLUENCED BY PUBLIC POLICY THAN A STRICT ANALYSIS OF THE SUFFICIENCY OF CONSIDERATION.
C = ex-wife
D = ex-husband
D paid a neighbour £1 per week to look after child
C asked if child could live with her and if she could receive the £1
D said YES, but only if child agrees and mother agrees to keep child happy
Child moved in with mother & C received £1 p/w for 7 months
C re-married
D refused to pay £1 p/w
D argued that it was the C's statutory duty to look after the child (under the National Assistance Act 1948)
HELD - although the mother was bound under the NA Act 1948 - the court found ample consideration in for the mother's promise to keep the child happy, and for allowing the child to choose whether or not she wanted to live with her. |
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Term
| Harris v Sheffield United FC [1988] |
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Definition
IN DETERMINING THE SUFFICIENCY OF CONSIDERATION GIVEN BY POLICE OFFICERS, THE COURTS MAY BE MORE HEAVILY INFLUENCED BY PUBLIC POLICY, THAN BY A STRICT ANALYSIS OF THE SUFFICIENCY OF CONSIDERATION
C = police officers
D = football clubs
Matches played at D's grounds required a heavy police presence.
C's claimed that this amounted to 'special police services' which meant that the D would have to pay their overtime
D argued that the police were merely carrying out their normal public duties in ensuring the maintenance of law and order
HELD - it was the D's responsibility to maintain law and order within their grounds - therefore, the police presence = sufficient consideration |
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Term
What do - Harris v Sheffield United FC [1988] AND Ward v Byham [1956]
tell us? |
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Definition
| That on certain issues, the courts are more influenced by public policy issues, than a strict analysis of the sufficiency of consideration. |
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Term
What if...
Party A is contractually bound to perform a task by party B. Then, party C offers party A consideration for performing a task which, unbeknownst to party C, A is already contractually bound to perform for party B....
Will party A's performance of the task be sufficient consideration w.r.t the agreement with party C? |
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Definition
| YES - a party can claim to have given consideration by doing what one was already bound to do under a contract with another party. |
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Term
| Which case confirms that a party can claim to have given consideration by doing what one was already bound to do under a pre-existing contract with another party? |
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Definition
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Term
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Definition
WHERE PARTY Y PERFORMS A TASK FOR PARTY X, THAT PARTY Y WAS ALREADY CONTRACTUALLY BOUND TO PERFORM BY PARTY Z, PARTY Y WILL HAVE PROVIDED SUFFICIENT CONSIDERATION FOR THE AGREEMENT WITH PARTY X
V owned some coal which was being shipped to a port
V contracted with the C to deliver the cargo of coal to whomever purchased it
D purchased the coal
D asked C to deliver the coal, and said that if the C delivered the coal, he (D) would unload it at a discounted rate.
D then discovered that C was already contractually bound by V to do so, and therefore charged C the full price for unloading the coal
HELD - the delivery of coal to D was sufficient consideration, it was immaterial that C was already contracted to deliver it, D still received a benefit from having the coal delivered to him. |
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Term
| What is the super useful comment that comes from Scotson v Pegg [1861] |
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Definition
'there is no authority for the proposition that where there has been a promise to one person to do a certain thing, it is not possible to make a valild promise to another to do the same thing.'
FURTHERMORE
The C had double liability because if they did not deliver the coal, both V and the D would have been able to sue them. |
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Term
| Which case confirmed the rule in Scotson v Pegg [1861] |
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Definition
| The Eurymedon case [1975] |
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Term
| The Eurymedon case [1975] |
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Definition
confirmed the rule in Scotson v Pegg [1861]
WHERE THERE HAS BEEN A PROMISE TO ONE PERSON TO DO A CERTAIN THING, IT IS POSSIBLE TO MAKE A VALID PROMISE TO ANOTHER TO DO THE SAME THING |
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Term
| Pao On v Lau Yiu Long [1980] |
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Definition
CONFIRMED THE RULE IN THE EURYMEDON
& EXTENDED IT TO COVER SITUATIONS WHERE THERE IS A PROMISE TO PERFORM AN ACT, RATHER THAN ACTUAL PERFORMANCE OF THE ACT |
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Term
One of the ratios in Scotson v Pegg & The Eurymedon, was that a person can contract twice to perform a task, because that person will also have double liability.
HOWEVER, w.r.t unilateral contracts, the contract does not come in to force until the task is completed - therefore, there is no direct right of enforcement until after the prescribed act is performed.
THEREFORE, does the Scotson v Pegg rule apply? |
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Definition
|
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Term
| Does English law recognise gratuitous promises? |
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Definition
| NO - consideration is COMPULSORY |
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Term
| Which case can be used to show that 'consideration must move from the promisee'? |
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Definition
| Tweddle v Atkinson [1861] |
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Term
| Tweddle v Atkinson [1861] |
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Definition
CONSIDERATION MUST MOVE FROM THE PROMISEE (PROMISEE WHO PROVIDES NO CONSIDERATION CANNOT ENFORCE AN AGREEMENT)
C was due to marry D's daughter
D and C's father agreed that they were going to pay some money to the couple
D did not pay
C sought to enforce D's promise
HELD - C had provided no consideration for the promise (money wasn't a dowry). Therefore, C could not enforce the agreement between his father and the D |
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