Consideration

Question 0

CJ Hamson

Answer 0

The common law notion of offer and acceptance does not apply to gratuitous promises - need consideration

Question 1

Currie v Misa, Thomas v Thomas

Answer 1

Definition - it is the ‘price of the promise’ - one sustains a benefit as the other sustains a detriment - the law pays no regard to the adequacy of the consideration but it does the sufficiency - adequacy being, at law, equal to the benefit, and sufficiency being managed by what is consistent with legal rules

Question 2

Chappell v Nestle

Answer 2

Consideration needs to have been shown as objectively moving from the promisee - the only exclusion is where it cannot be ascertained before the court e.g. ‘that you treat me how you used to’
- The benefit here was selling more chocolate bars and the indirect benefit of advertisement

Question 3

Cook v Wright

Answer 3

Being spared the expense and trouble of legal claims is consideration, even if those claims should never have been brought against you personally - note policy issue, of course, the case may well have been thrown out the case, but that has yet to be decided so it is mere speculation

Question 4

Wade v Simeon

Answer 4

No consideration, same as Cook v Wright but here the claimants KNEW that they didn’t have a cause of action and the giving up of a claim in bad faith did not amount to consideration - McKendrick’s criticism of the emphasis on the C’s state of mind - this may exclude consideration where bad faith is at play

Question 5

Combe v Combe

Answer 5

Consideration needs to be requested, so here, where the wife had said she had avoided going to the divorce court and that was the consideration, he had not asked her to do so

Question 6

Dickinson v Abel

Answer 6

Consideration distinguished from gifts - the absence of a deal - the gift can be conditional on something happening but to decide whether that is consideration is to look at whether something moves from the promissee

Question 7

Roscorla v Thomas

Answer 7

Consideration must not be past - must constitute one single transaction

Question 8

Lampleigh v Braithwaite

Answer 8

Implied Assumpsit - exception to Roscorla - something done before a promise can make the promise bind despite the timing, therefore, it is the second promise which is the real one

Question 9

Re Casey’s Patents, Pao On

Answer 9

Implied assumpsit - Even though the promise came after his resignation, the first promise could only have been given proper effect for his past services – must look at the document and see if it could have been, or was, given proper effect at the time

Question 10

Collins v Godefroy

Answer 10

If the duty that is being contracted is an existing one at general law, not contract, then the usual view is that it will not amount to consideration - this is not necessarily for reasons of consideration, however, it seems to be more of a policy issue here re witnesses

Question 11

Ward v Byham

Answer 11

A legal duty can be consideration - just because there is an existing legal duty does immediately negate good consideration - here, the father too benefited from the mother looking after their child - here the promise should be honoured and not avoided on a technicality and there are no policy issues

Question 12

Scotson v Pegg, approved in The Eurymedon

Answer 12

Performance of contractual duties to a third party - in the latter Wilberforce L construed the contract as a whole and it was of a commercial character - he also distinguished between the technical doctrine and its practical application, there are many times we cannot readily find consideration -

Question 13

White v Bluett

Answer 13

Consideration could not be found where one had no right to do what was being promised in the first place (this was complaining to his father) - however, this is not illegal and the court could have found consideration -

Question 14

Lipkin Gorman

Answer 14

HL - solicitor here was buying the opportunity to gamble, nothing else - also seems to be strategic on behalf of the house as finding consideration would have negated the firm’s right to restitution to restore the stolen money – this shows the flexibility of consideration

Question 15

Stilk v Myrick

Answer 15

Existing contractual duties to the promisor as consideration - the sailors had not given consideration for the captain’s promise of extra wages - there was no duress, it was merely fear of future duress

Question 16

Hartley v Ponsonby

Answer 16

Existing contractual duties - here, it was different to Myrick as the ship was so short-handed to be dangerous, so consideration had been given and went beyond their original contractual duties - the deal done in Australia amounted to a new contract

Question 17

Williams v Roffey

Answer 17

Evasion of rule in Stilk - the rule remained so that a gratuitous promise is not enforceable (unless made in deed) - here there was a practical advantage for promisor who benefited - Russell LJ - the assessment of consideration reflects the parties’ intentions, not the technical theory of cons. - this is limited to work cases, not applicable to payment

Question 18

Re Selectmove

Answer 18

Williams is not extended to the debtor/creditor relationship, this is to be governed by Foakes v Beer

Question 19

Pinnel’s Case

Answer 19

Part-payment of a debt requested and accepted before the day will satisfy the whole debt - whatever it is may be a benefit to the creditor and can therefore be full satisfaction of the whole - also because the law will not judge the adequacy of the consideration - by doing it on the day, the creditor is receiving nothing new

Question 20

Foakes v Beer (approving Pinnel’s Case)

Answer 20

The creditor had not received any extra consideration for the interest she purported to be entitled to - what this shows is that a creditor does not easily forego debt but is aware that creditors are often unscrupulous in tricking debtors - the rule in Pinnel’s Case stops this from happening -

Question 21

Van Bergen (2), Hirachand v Temple(3)

Answer 21

The evasion of the rule in Pinnel’s case, 1. before the date (PC), 2. At a place other than the one fixed for payment - this must be requested, not a ‘voluntary indulgence’ like here’, 3. By someone other than the debtor - this creates a new contract (most likely theory)