Chapter 3 - Other Requirements Flashcards
What is consideration?
“The price paid for a person’s promise”
In which case did Sir Fredrick Pollock create the idea that consideration is about “the price of a price”?
Dunlop Pneumatic Tyre Co v Selfridge & Co Ltd [1915]
In which case did the use of benefits and detriments come about in relation to consideration, and what is the general definition of consideration in this regard?
Currie v Misa [1875]. The idea is that there is consideration if one party is suffering a detriment and the other is obtaining a benefit.
What is a “bare gift”
An agreement in which there is no consideration given in exchange for a promise. They are generally unenforceable.
What is the exception to the rule that an agreement without consideration is unenforceable?
A promise need not be supported by consideration if it is contained in a deed which has been signed, witnessed and delivered (acted upon) by the person making it.
What is executed consideration?
When a party performs their obligation under a contract at the time of entering into it.
What is executory consideration?
When parties exchange promises to do something in the future. The promise itself is the consideration.
What are the four main rules governing consideration?
It must move from the promisee / it must not be past / it need not be adequate / it must be sufficient
What is the meaning of the rule “consideration must move from the promisee”?
A claimant wishing to sue must prove they have supplied consideration for the promise they wish to enforce. A claimant cannot generally sue if the consideration was supplied by someone else even if the promise was for their benefit (privity of contract) however they will not always be defeated simply on this basis (as in Tweddle v Atkinson [1861].
What is the meaning of the rule “consideration must not be past” and what case law illustrates this point?
Promises in a valid contract are made in exchange for each other and therefore, a party cannot promise to do something which they have already done. Roscorla v Thomas [1842] or Re McArdle [1951]
Explain the main exception to the rule that consideration must not be past?
The doctrine of implied assumpsit, which was established in the case of Lampleigh v Braithwait [1615]. The rule is that if a party performs a service which is normally paid for at the request of the other, then the court will assume that it was meant to be paid for and would enforce a later promise to pay. It occurs for situations such as such as getting a taxi or going to a hairdresser.
The Privy Council in Pao On v Lau Yiu Long [1980] stated that the doctrine of implied assumpsit would apply provided that ..? (three points)
The act was performed at the promisor’s request / It was understood between the parties that a reward would be expected / The later benefit received was otherwise lawful.
What is the corporate case law which applied the doctrine of implied assumpsit?
Re Casey’s Patents [1892]
What is the meaning of the rule that “consideration need not be adequate”, why do the judges use it, and give a case law example?
Consideration does not have to be of equal value to the promise given in exchange, because judges wish parties to make the contract they want rather than the court having to decide a fair contract on their behalf. Used in Chappell & Co v Nestle Co Ltd [1960].
What is the meaning of the rule “consideration must be sufficient”?
As per Thomas v Thomas [1842], sufficient consideration is defined as something with “some value in the eyes of the law”. To be considered something “of value”, it must have economic value and therefore, money (no matter how much) will be considered sufficient consideration
Why was the promise in White v Bluett [1853] by a son to “cease his complaints” about his father’s planned will held not to be valid consideration?
The son had no legal right to make the complaints and so the alleged detriment to him (of stopping the complaints) was not recognised “in the eyes of the law”.
Which case law examples show where consideration has been found in situations where the promise has little or no economic value?
Ward v Byham [1956] (promise to keep a child well looked after and happy) and GNR v Witham [1873] (to walk to York). As long as parties believe the consideration has SOME value, the courts will not normally interfere.
What are the four situations that can arise in which a party promises to do something which they are already legally obliged to do as consideration for a new contract (where the consideration is then generally not valid)?
existing public duties / existing contractual duties / existing duties to repay a debt / existing duties to a third party
What is a case law example of when a promise to perform an existing public duty was not sufficient consideration?
Collins v Godefroy [1831] (witness could not be paid for attending a trial as he was already legally obliged to attend)
What is a case law example of when a promise to perform an existing public duty was considered sufficient consideration?
Glasbrook Bros v Glamorgan County Council [1925] (larger police force was sent to protect property than necessary thus exceeding the existing duty) also applied in Harris v Sheffield United Football Club [1988] and Reading Festival Ltd v West Yorkshire Police Authority [2006] as these were both events where ‘extra’ police were sent - so they are entitled to their payment for that service
Why isn’t performance of existing contractual duties usually seen as valid consideration? Give a case law example.
Because there is no fresh consideration offered, the party is simply doing what they were already contractually obliged to do. Illustrated by Stilk v Myrick [1809] (in which a ship’s captain offered to pay sailors extra for completion of extra work but the ‘extra’ work was already an obligation under their contract so they had provided no fresh consideration for the extra pay(
When will a promise to pay for completion of extra work be valid and what case law shows this?
When that extra work is outside of an existing contractual duty, as in Hartley v Parsonby [1857]
When will a promise to pay for completion of existing contractual duties be valid and what case law shows this?
The Court of Appeal, in Williams v Roffey Bros [1990], stated that a party (Williams) could be entitled to an additional payment if the other party (Roffey) obtained some practical benefit in doing so (in this matter paying Williams meant not missing a deadline) and there was no economic duress (the party seeking the additional payment had not forced the other to offer this)
What is the rule regarding repayment of an existing debt which originated in Pinnel’s Case [1602]?
A promise to pay part of money owed to someone providing they will not enforce the rest of the debt is not enforceable and not good consideration as it is agreeing to do less than an existing duty and so there is no detriment suffered.
