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Contract Law - Formation of a Contract > Consideration > Flashcards

Flashcards in Consideration Deck (21):
1

What is consideration?

Something of value which causes a benefit and detriment to both parties

2

Types of consideration

Executory
Executed
Past

3

What is past consideration?

When the act is performed before the promise or agreement is made

4

What is executed consideration?

When a promise is made by one of the parties (used for unilateral contracts)

5

What is executory consideration?

When both parties exchange promises (used in bilateral contracts)

6

Rules on consideration

1) consideration need be adequate not sufficient
2) consideration must pass from promisee to promisor
3) past consideration is bad consideration
4) if one has a previous obligation to act this is not consideration
5) part payment + consideration may discharge a whole payment

7

Case for consideration must pass from promisee to promisor

Tweddle v Atkinson

8

Facts of Tweddle v Atkinson

add these in too tired right now

9

Case related to 'consideration need be adequate not sufficient'

Thomas v Thomas

10

Facts of Thomas v Thomas

The husband of C expressed he wished for her to stay in the house after his death
She did so paying £1 rent a year
Executors tried to remove her from the house

11

Outcome of Thomas v Thomas

Executors tried to argue there had been a breach as no consideration was given
Court held the £1 rent would suffice. It was established that some consideration was enough, even if it was not equal

12

Case relating to past consideration...

Re McArdle

13

Facts of Re McArdle

C lived with husband in his mothers house
Mother said the house would be given to children on her death
C spent her money repairing the house
Mother made children sign agreement to pay C back
When she died children got the house and didnt repay the money
C sued

14

Outcome of Re McArdle

C's claim was unsuccessful
She had completed the act before the agreement had been reached
Therefore this is past consideration and not accepted in court

15

Why is consideration not accepted if one already had a pre- existing duty?

Because consideration relates to the idea of detriment, one will not be at detriment if they were obliged to complete it

16

Case relating to pre-existing duty

Stilk v Myreck

17

Facts of Stilk v Myreck

Whilst sailing a ship 2 of the 11 crew member deserted
Crew demanded more money
Captain agreed but refused to pay on return

18

Outcome of Stilk v Myreck

The court stated that the sailors already had a contractual duty to sail the ship too and from therefore they had not provided consideration this the captain did not have to either

19

Exception to pre-existing duty rule (+case)

If the contractual duty is exceeded then this will be consideration - Hartley v Ponsby

20

Facts of Hartley v Ponsby

Very similarly to Myreck only this time 19/36 crew remained

21

Outcome of Stilk v Myreck

Court held the captain needed to pay them. They had exceeded their contractual duty because their lives were endangered sailing with such few soldiers. This was sufficient consideration