Consideration

Question 1

What are the two elements of consideration?

Answer 1

a) adequacy of consideration

b) sufficiently of consideration

Question 2

What is adequacy of consideration?

Answer 2

Consideration need NOT be adequate

Adequacy = amount of value of consideration

Simply has to give some value

Question 3

What is sufficiency of consideration

Answer 3

Consideration MUST be sufficient

“The sort of thing it is”

Money, goods and services provided in exchange for the other parties commitment is sufficient!

Question 4

What is the exceptions to the rule that past consideration is not good consideration?

Answer 4

a) past act/ promise was done at promisors request

b) mutal understanding between the parties that the act/promise would be compensated in some way

c) had the promise been made in advance it would have been legally enforceable

Question 5

What must there be for a contractual variation to be binding?

Answer 5

1) agreement

2) intention to create legal relations

3) consideration

Question 6

Is a promise to accept less binding on a creditor and what is the exception?

Answer 6

It is not binding UNLESS there is some consideration for the concession.

For example, early payment

Question 7

What are the limitations to promissory estoppel?

Answer 7

1) can only be a defence

2) promisee (debtor) must have acted on the promise but not necessarily to thier detriment

3) ongoing payments - creditor can resume their right to full payment by giving reasonable notice. Creditor cannot claim any back payment

4) party must have “clean hands”