Consideration - Part 2 (Contract Formation)- FS Flashcards
(8 cards)
What are the three essential requirements to make a contractual variation legally enforceable?
Agreement, consideration, and an intention to create legal relations.
Is performing an existing contractual duty sufficient consideration for a promise of extra payment?
No. Performing a duty already owed under a contract is not valid consideration for a promise to pay more unless additional detriment is undertaken or a practical benefit is received by the promisor.
Is Exceeding Contractual Duties Valid Consideration?
Where a party goes beyond their existing contractual obligations, the additional effort or detriment can constitute valid consideration for a promise of further payment
When can a promise to pay more become binding despite no new detriment by the promisee?
When the promisor gains a practical benefit from the promise, such as avoiding penalties, saving time or costs, or ensuring completion of the contract.
Is a promise to pay more binding if made under pressure or without new consideration?
No. A promise made under economic duress or without new or practical benefit is not legally binding.
For a practical benefit to justify a binding promise to pay more:
- There must be an existing contract.
- The promisee continues to perform their obligation.
- The promisor gains a practical (not merely legal) benefit.
- There is no economic duress or fraud involved.
What is executory consideration in the context of contract variation?
A promise to do something in the future as part of the revised agreement; valid if it offers a practical benefit or additional detriment.
Under what circumstances is a contract variation enforceable when the promisee does not provide additional work?
If the promisor derives a practical benefit from the variation and the agreement is free from duress, the variation can be enforceable despite the absence of additional work.
