Consideration Flashcards
(37 cards)
What does consideration require?
an element of reciprocity
e.g. I give you money in exchange for your promise
What does consideration distinguish between?
bargains -> which the law enforces
AND gratuitous promises -> law does not enforce
Which case defines consideration?
Currie v Misa (1875)
quoted definition is found on the sheet
What constitutes consideration in a unilateral contract?
- the promisee’s performance of the requested act is the consideration of the promise
- the promise is the consideration for the performance of the requested act
What constitutes consideration in a bilateral contract?
- consideration is executory -> the contract is yet to be performed
- each party’s promise is consideration for the other
Which case discusses what constitutes valuable consideration?
what does it state?
Thomas v Thomas (1842)
‘consideration means something which is of some value in the eyes of the law’
What does the consideration need to be?
What is it okay not to be?
which case highlights this?
needs to be sufficient
doesn’t matter if it’s not adequate
Chappell & Co Ltd v Nestle Co Ltd [1960]
Case example for nominal consideration
- ## Chappell & Co Ltd v Nestle Co Ltd [1960] -> chocolate wrappers
Case example for what was found to not be consideration
Lipkin Gorman v Karpnale Ltd [1992]
- gaming chips found to be only a mechanism for facilitating gambling -> not consideration
What is the general rule for intangible benefit?
Case
intangible benefits aren’t good consideration
White v Bluett (1853)
What is an exception to the general rule for intangible benefits?
Ward v Byham [1956] -> looking after her child was considered good consideration
What is a lock-out agreement?
- agreements not to negotiate with others
- enforceable when they have a definite end date
- another example of intangible benefit as consideration
Which 2 cases discuss consideration for lawsuits?
- Cook v Wright [1861] -> consideration depends on the reality of the claim and bona fides of the compromise, not the actual commencement of the suit
- Wade v Simeon [1846] -> The court held that consideration may lie in the promisee’s forbearance from suing the promisor, unless the promisee has no case
Is past consideration good consideration?
No
General rule is that past performance is not good consideration and therefore a promise to pay for past performance is gratuitous
3 cases on past consideration
- Eastwood v Kenyon (1840) -> sets out general rule
- Re McArdle [1951] Ch 669 -> The promise to make payment came after the consideration had been performed -> the promise to make payment was not binding -> Past consideration is not valid.
- Roscorla v Thomas [1842] -> past consideration for a prior promise is not good consideration for a new promise
What is the doctrine of implied assumpit?
a promise that is not explicitly stated but is implied by law or by the circumstances of a situation
Which case is an example of implied assumpit?
- Lampleigh v Brathwait (1615)
- D killed a man, asked C to obtain royal pardon for him; C incurred expenses in doing so; D broke promise to pay C for what he had done -> C sued
- An act requested by the promisor with the understanding that it will be rewarded is valid consideration even if it were performed prior to the promise for reward being given
What does the case of Re Casey’s Patents [1892] state?
- The promise to pay was, therefore, just a crystallization of this reasonable expectation
- past work was good consideration
Which case sets out 3 requirements for implied assumpit?
What are they?
- Pao On v Lau Yiu Long [1980]
1. performance must be at the request of the promisor
2. it was clearly understood or implied between the parties at the time of the request that the promisee would be rewarded for doing the act
3. the later promise must be one which would have been enforceable if it had been made at the time of the act
Where must consideration move from?
case
the promisee
Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd [1915]
What are the requirements for a contract claimant?
case
- be the promisee
- have given consideration
Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd [1915]
Does consideration have to move to the promisor?
case
No
Jones v Padavatton [1969]
Who must request the consideration?
case
the promisor
Combe v Combe [1951]
Does performance of a public law duty constitute valid consideration?
cases
No -> Collins v Godefroy [1831] (attending court as a witness)
Yes -> Ward v Byham [1956] (looking after your illegitimate child)
