Consideration

Question 1

What is consideration?

Answer 1

Some right, interest, profit, or benefit accruing to one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other

Question 2

What is the underlying principle of consideration?

Answer 2

Reciprocity- A promisee should not be able to enforce a promise unless he has given or promised to given something in exchange for the promise unless the promisor has obtained something in return

Question 3

What are the elements of consideration?

Answer 3

The promisee acts to their detriment in reliance of the promise, giving something in value for the promise

Question 4

What are the rules of good consideration?

Answer 4

Consideration must be sufficient but need not be adequate
Past consideration is not good consideration
Consideration must move from the promisee

Question 5

What is the general rule regarding sufficient consideration?

Answer 5

The courts will not enforce a promise unless something of value is given for the promise

Question 6

What is the main authority for sufficient consideration?

Answer 6

Chappell v Nestle

Question 7

What does the law recognise as value?

Answer 7

Must be sufficient but need not be adequate

Question 8

What is past consideration?

Answer 8

An act performed before the time the promise was made. This is not good consideration. The action must correspond with the promise

Question 9

What is the leading case law for past consideration?

Answer 9

Eastwood v Kenyon; Roscolora v Thomas

Question 10

What are the exceptions to past consideration?

Answer 10

Where there may be an implicit assumption

Question 11

What is the test for implicit consideration?

Answer 11

Pao On v Lau Yui Long- The doctrine of implied assumpit

Question 12

What was the test for implicit consideration?

Answer 12

Was the act done at the request of the promisor
Was there an understanding of payment at the time?
Would the contract otherwise be enforceable?

Question 13

What is an existing obligation?

Answer 13

Promising to do something that is already expected of you. It is not good consideration because nothing is being given up.

Question 14

What is the general rule where there is an existing obligation of a public body?

Answer 14

Harris v Sheffield- an existing consideration can amount to good consideration where the promisee goes over and above their basic obligation

Question 15

What is the general rule for an existing duty owed to a 3rd party?

Answer 15

Scottson v Pegg- there is good consideration from each party due to the provision of each party with an independent right to sue on the failure to unload.

Question 16

What is the general rule for an existing contractual duty?

Answer 16

Stilk v Myrick- existing contractual obligations is not good consideration

Question 17

In which case was this distinguished from?

Answer 17

Hartley v Ponsonby- essence of the contract had changed requiring a different undertaking of the sailors. = good consideration (action was over and above their existing contractual promise)

Question 18

What was the principle established in William v Roffey Bros?

Answer 18

Where the promisor obtains a practical benefit or obviates a disbenefit, this may amount to good consideration

Question 19

What was the test set out in Williams v Roffey Bros?

Answer 19

A has a contract with B
B has reason to doubt A’s performance
B promises extra to perform on time
B obtains a practical benefit or obviates a detriment
Promise was not given as a result of fraud or duress

Question 20

What is the general rule for part payment of debt?

Answer 20

Does not discharge the obligation to pay the full amount and is not good consideration

Question 21

What is the exception to the rule?

Answer 21

Pinnel’s case- if one promises to pay part of the debt and an additional element = good consideration

Question 22

What is the principle of promissory estoppel grounded in>

Answer 22

The quality of being fair and impartial

Question 23

Which case introduced the general rule of promissory estoppel?

Answer 23

Central London Property Trust v High Trees House

Question 24

Does Promissory estoppel extinguish the promisor’s legal rights?

Answer 24

No- the effect is suspensory until it is equitable to claim

Question 25

What are the elements of promissory estoppel?

Answer 25

A clear, unequivocal promise to suspend existing contractual rights
Change of position by promisee in reliance of the promise
Can only be used as a shield not a sword - only a defence against someone trying to enforce a right against you (Combe v Combe)

Question 26

Which case illustrates that the promisee’s position must have been altered in reliance of the promise?

Answer 26

Ajayi v Briscoe

Question 27

Can you claim for the missed payments during the suspension period?

Answer 27

No- from the moment it becomes equitable to reinstate legal rights

Question 28

What is the leading case on performance of an existing duty?

Answer 28

Ward v Byham

Question 29

Why was consideration found in Ward v Byham?

Answer 29

The mother went above her legal obligation to which the father obtained a practical benefit

Question 30

What is estoppel?

Answer 30

Where A has, by his words of conduct, justified B in believing that a certain state of facts exists, and B has acted upon such belief to his prejudice. A is not permitted to affirm against B a different state of facts existed at the same time

Question 31

What does estoppel relate to ?

Answer 31

The legal rights of the promisor

Question 32

What are the elements of promissory estoppel?

Answer 32

There is a promise or representation as to future conduct, intended to affect the legal relations between the parties.
Clear and unequivocal indication that promisor will not insist on strict legal rights.
Promise is relied upon by the promisee- submit to a course of action that he would not have otherwise adopted.
Inequitable for promisor to go back on his promise

Question 34

When can a promisors legal rights be reinstated?

Answer 34

By giving reasonable notice

Question 35

What is the leading case for proprietary estoppel?

Answer 35

Pascoe v Turner (relates to the acquisition of an interest in property)