BPP Manual Ch 5: Consideration Flashcards
What two cases set out the definiton of ‘consideration’?
- Currie v Misa
- Dunlop v Selfridge
Define consideration.
- an act or forebearance of one party
- or the promise thereof
- is the price for which the promise is bought
- and the promise thus given for value is enforceable
What is an executory consideration? Give an example.
- where contracting parties promise to perform something in the future after the contract has been formed
- eg contract for sale of goods. Sellor promises to deliver in the future and buyer promises to pay on delivery
What is an executed consideration? Give an example.
- where, at the point of formation of the contract, the consideration has already been performed
- eg a unilateral contract where teh required act is both acceptance and executed consideration
What is the rule regarding consideration given in the past? Demonstrate with a case.
- generally cannot use an act as consideration if it took place prior to the promise to pay.
- consideration must be given in return for the promise
- Roscorla v Thomas: sale of a horse BEFORE promise it was well-tempered was made. No consideration for the promise
What is the exception to the past consideration rule?
- where when the consideration is given there exists an understanding that payment would be made.
- eg Lampleigh v Brathwait: lampleigh’s efforts to secure Brathwait’s freedom was good consideration for B’s later promise to pay.
What is the test for when teh exception to the past consideration rule can be applied? From what case?
- Pao On v Lau Yiu Long
1) act must have been done at the promisor’s request,
2) parties must have understood that the act was to be rewarded by payment or some other benefit, AND
3) the payment/other benefits must have been legally enforceable had it been promised in advance
How must consideration move for a contract to be enforceable? What is this rule known as?
- ‘consideration must move from the promisee’
- means a party who has not provided consideration cannot enforce a contract
Give a case that demonstrates that consideration must move from the promisee.
- Tweddle v Atkinson
- a groom couldn’t enforce a promise by his new father-in-law to give him money because he offered no consideration.
How does the law view deals of inequal value? Give a case that demonstrates this.
- not the court’s duty to assess the relative value of each party’s contribution to a bargain.
- Chappell v Nestle: chocolate wrappers part of the consideration of the contract even though they were valueless
Can a consideration be completely valueless then? Give a case that demonstrates this.
- No: must have some value, regardless of how small, in the eyes of the law
- White v Bluett: a son’s promise not to complain about his father’s distribution of his property was held to be valueless and therefore not good consideration. (Because the son had no legal right to complain about the distribution, he was giving up nothing).
What happened in Stilk v Myrick?
- ship captain promised the crew extra wages for doing the extra work of two deserters
- not binding because no consideration from the crew - they had a pre-existing obligation to do the extra work anyway
What happened in Hartley v Ponsonby?
- a ship’s crew had been seriously depleted by desertions.
- captain promised a bonus to the crew if they would complete the voyage
- the journey was more dangerous because the ship was undermanned
- the crew were therefore not obliged to to take it under their contracts of service and therefore entered a new contract which included this renumeration clause.
What was the judgement in Williams v Roffey?
- one side gained certain practical benefits from a new work arrangement
- there was therefore consideration for their promise to pay extra money to achieve these benefits.
What are the three cases that relate to existing obligations under contract?
- Williams v Roffey
- Stilk v myrick
- Hartley v Ponsonby
