Consideration

Question 1

Currie v Misa

Answer 1

Definition of consideration - Consideration may consist either in some right, interest, profit, or benefit accruing to the one party, or some forbearance, detriment, loss, or responsibility given, suffered or undertaken by the other..

Question 2

Dunlop v Selfridge

Answer 2

Definition of consideration - Consideration may consist either in some right, interest, profit, or benefit accruing to the one party, or some forbearance, detriment, loss, or responsibility given, suffered or undertaken by the other..

Question 3

Eastwood v Kenyon

Answer 3

Past consideration is not good consideration

Question 4

Re McArdle

Answer 4

Past consideration is not good consideration:

The five children of a family were to inherit a house (by their fathers will) after the death of their mother. One of the sons, and his wife, lived in the house with his mother until she died. During this period the daughter-in-law made some improvements and alterations to the property, which she paid for herself. She had not been asked to do this. However, about a year later, all five children signed a document addressed to her, in which they promise to repay her 480 pounds from the estate when it was eventually distributed. The document specifically stated that this payment was in consideration of her carrying out certain alterations and improvements to the property. When the mother died, the daughter-in-law try to enforce the promise made in this document. The Court of Appeal held that her claim failed; the promise was not given in exchange for her act. This was a clear instance of past consideration and the promise was unenforceable.

Question 5

Roscorla v Thomas

Answer 5

Past consideration is not good consideration:

C bought a horse from D for 30 pounds. After the sale, D promised that the horse was sound and free from vice, a fact which turned out to be untrue. It was held that this promise was not enforceable, as it was given after the contract between the parties had been concluded. Nothing was given by C in exchange for D’s promise.

Question 6

Pao On v Lau Liu Long

Answer 6

Exception to past consideration not being good consideration.

and act done before the giving of a promise to make a payment or to confer some other benefit can sometimes be consideration for the promise. The act must have been done at the promisor’s request, the parties must have understood that the act was to be remunerated either by a payment or the conferment of some other benefit, and payment, or the conferment of a benefit, must have been legally enforceable had been promised and advanced

Question 7

Lampleigh v Brathwait

Answer 7

Exception to past consideration not being good consideration.

Brathwait Had killed a man and he requested that Lmapleigh should try to get him a pardon from the King. Lampleigh It is requested, which involved making journeys at his own expense, and obtained a pardon for Brathwait. afterwards, B promised to pay him 100 pounds for his endeavours. He then failed to pay L and was sued by him. B’s defense was that the act had been performed before the promise of a award was made.

The court found in favour of L and rejected the argument that the consideration was passed. It stressed that the claimant’s service was performed at the request of the defendant and his later promise to pay for it was binding. This is because the later promise was clearly related to the earlier request for help: essentially, it was all part of the same transaction.

Question 8

Tweede v Atkinson

Answer 8

Consideration must move from the promisee.

John Tweddle and William Guy agreed (at first orally, and later in writing) each to pay a sum of money to a couple on their marriage. The couple in question were their son and daughter, respectively. The claimant, John Tweddle’s son, tried to enforce his father-in-law’s promise, when William Guy failed to make the agreed payment. In fact, the action was brought against the executor of the deceased William Guy.

the sons action failed as he did not provide any consideration for his father-in-law’s promise.

Question 9

Thomas v Thomas

Answer 9

Consideration must be sufficient but need not be adequate.

The promisor must receive something which the law recognizes as a benefit, namely something of value.

Question 10

White v Bluett

Answer 10

Consideration must be sufficient but need not be adequate.

The promisor must receive something which the law recognizes as a benefit, namely something of value.

The defendant borrowed money from his father and gave him a promissory note. This was followed by bitter complaints from the defendant that he had been treated less favourably by his father than the other children in the family. In order to gain some peace, and out of affection for his son, the father promised to discharge the defendant from his obligation to repay the loan. On the father’s death, his executor brought a successful action to recover the loan. He was held at the no consideration had been provided by the defendant for his father’s promise, as refraining from making complaints was thought not to be of any economic value.

Question 11

Ward v Byham

Answer 11

Consideration must be sufficient but need not be adequate.

The promisor must receive something which the law recognizes as a benefit, namely something of value.

The claimant lived with the defendant for five years as an unmarried couple. The claimant gave birth to their daughter during this period, but the couple eventually separated. Initially, the defendant was responsible for looking after the child, as the claimant had been forced to leave their home. But when the claimant found a housekeeping job, where she could have her daughter with her, the defendant agreed to let her have the child and an allowance of 1 pound per week, provided that the claimant could prove that their daughter was “well look after and happy.” The daughter, who was allowed to decide with which parent she wanted to live, went to her mother’s. The defendant made the 1 pound weekly payments, but stopped these when the claimant married her employer. The claimant brought an action for the £1 per week promised by the defendant.

The Court of Appeal decided in favour of the claimant and held that she did provide consideration for the defendants promise. In fact, the claimant was under a legal obligation (as the mother of an illegitimate child) to look after her daughter. The view was generally health the performance of a statutory duty could not provide consideration. However, it was argued that she went beyond her statutory duty by undertaking that the child was well looked after and happy. Going beyond the statutory duty was well recognized as sufficient to provide consideration.

Question 12

Chappell v Nestle

Answer 12

Consideration must be sufficient but need not be adequate.

The promisor must receive something which the law recognizes as a benefit, namely something of value.

The nestle company, the defendants, offered a record entitled rocking shoes to the public for 1s 6d (7.5p) plus 3 nestle chocolate bar wrappers. the requirement of sending in the wrappers, in addition to the money, was in order to promote the company’s chocolate; the wrappers were thrown away on receipt. The action arose because the claimant, who owned the copyright in rocking shoes, argued that he received insufficient royalties on the sale of the record. The nestle company paid a percentage based on the price of the record, which was 1s 6d. The claimant argued that the rappers were also part of the consideration.

The House of Lords decided the case in favour of the claimant. The wrappers were part of the consideration. They were requested by the nestle company and were given by members of the public, together with money, in exchange for the record. It was held to be irrelevant that the wrappers were of no intrinsic value to the company.

Question 13

Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Limited

Answer 13

Display of goods in a self-service shop are invitations to treat.

Question 14

Collins v Godefroy

Answer 14

Performance of existing public duty is not good consideration for new agreement.

The claimant was subpoenaed to give evidence on the defendant’s behalf at trial in which the defendant was involved. The claimant claimed that the defendant promised him one guinea per day for attending court. But the claimant was unsuccessful in his attempt to enforce the defendants promise, as he failed to provide consideration for this promise. The claimant was already under a legal duty to attend court because of the subpoena, and the case is thought to have established a general principle that a person does not provide consideration for another person’s promise by simply performing an existing legal duty.

Question 15

Stilk v Myrick

Answer 15

Performance of existing contractual duty is not good consideration for new agreement.

The fax arose out of a return voyage from London to the Baltic, during which two sailors had deserted and the captain was unable to find replacements for them. He promised to divide the wages of the two deserters amongst the remaining crew members in exchange for their sailing the ship shorthanded on the home voyage. The action brought by one of the crew, to enforce this promise, failed. The crew members provided no consideration for the captain’s promise, as they were only fulfilling their existing contractual obligations by sailing the ship home, and the case was long regarded as base on this consideration point.

Question 16

Hartley v Ponsonby

Answer 16

Exceeding an existing contractual duty can be good consideration for new agreement.

A crew of 36 was reduced by desertion to one of 19, of which only a handful were experienced sailors. the situation was distinguishable from that of Stilk v Myrick (1809) and the claimant was able to enforce the captain’s promise of an additional £40. The situation was exceptional: continuing with the voyage was so dangerous that the remaining crew members were not simply fulfilling their existing obligations. Consideration was provided for the captain’s promise.

Question 17

Glassbrook Brothers v Glamorgan County Council

Answer 17

Exceeding an existing public duty can be good consideration for a new agreement.

Mine owners, during a minors strike, or fearful of violence occurring. Their assessment of the amount of police protection that they needed differed from that of the police whose job it was to provide it. Eventually, the police did agree to mount a stationary guard, which they did not think necessary, but they did so on the basis that it would be paid for by the company. The company agreed to pay 2200 pounds for this more expensive police operation, but later refused to make the payment, claiming that there was no consideration given for their promise. The House of Lords held that the police were entitled to recover the payment as they had done more than perform their existing legal duty.

Question 18

Williams v Roffey

Answer 18

Performance of existing contractual duty can be good consideration if there is practical benefit/avoidance of disbenefit.

the defendant building contractors were under contract to refurbish a block of 27 flats. They subcontracted the carpentry work out to the claimant for 20,000 pounds. After completing some of the work, and receiving intern payments under the subcontract, the claimant found that he was in financial difficulties because the remuneration under his contract with the defendant was too low and he had failed to supervise his workman properly. The defendants were liable under a penalty clause in the main contract if the work was not completed on time, and they were aware that the claimant was in difficulties because the carpentry work had been underpriced. They called a meeting with the claimant at which they promised an extra 10,300 pounds to ensure that the claimant continued with the work and finished it on time. The extra payment thus agreed was to be at the rate of 575 pounds per flat on completion. The complainant continued working, but the defendants did not keep up the additional payments which they had agreed. The claimant then stopped work on all the remaining flats and sued the defendants for the additional sum promised. The defendant argued that no consideration had been provided by the claimant for the promise of extra payment.

The Court of Appeal held that the claimant was entitled to the additional payments for the flaps completed. There was no evidence of economic duress: the original contract underpriced the work and the defendants understood this and themselves commenced the process of renegotiation. The defendants also gained a benefit under this later agreement. It was important to them to be sure that the work was completed promptly; they were faced with a penalty clause under the main contract. The court took the line that the claimant provided consideration for the defendants promise of additional payment. The defendant gained a practical benefit, the agreement was not affected by duress, and it was binding.

Question 19

Pinnel’s Case

Answer 19

Part payment of debt cannot be considered for a promise to relinquish the whole.

Question 20

Foakes v Beers

Answer 20

Part payment of debt cannot be consideration for a promise to relinquish the whole.

Julia beer had obtained a judgment in the High Court against John Foakes for 2090 pounds. More than a year later, Dr. foakes, requested time to pay. It was agreed by the parties, in writing, that if the doctor paid 500 pounds immediately and then paid by annual instalments of 150 pounds until the debt was only paid, Mrs. beer would not take any proceedings what ever on the said judgment. The doctor paid the debt, in the agreed way, and then Mrs. beer claimed interest. The doctor was liable to pay interest on a judgment that, but their agreement had made no reference to this. The doctor argued that Mrs. beer had promised not to take any action on the debt if he paid in the prescribed manner. But even assuming that the agreement covered the question of interest, did the doctor provide any consideration in return for Mrs. beers promise?

The House of Lords found in favour of Mrs. beer and upheld her claim for the interest. The rule in the Pinnel’s Case was seen as too long-established to reject.

Question 21

D&C Builders v Rees (1966)

Answer 21

The claimants were small firm of builders, who had done some work for the defendant, as a result of which the defendant still owed them 482 pounds. The claimants were in financial difficulties and the defendant, having delayed payment of the debt, instructed his wife to offer the builders 300 pounds and no more. The financial problems of the claimants (which were allegedly known to the debtors was parenthesis led them to accept the offer of 300 pounds in full settlement. They later sued for the balance.

The Court of Appeal held that the builders were entitled to claim the rest of the debt from the defendant, who had given no consideration in exchange for the claimant’s promise to accept part payment of the debt.