Formation of a contract: Consideration

Question 1

What does every contract contain?

Answer 1

Consideration

Question 2

What does consideration mean?

Answer 2

Both parties give must give something

Question 3

What case defined consideration?

Answer 3

Currie v Misa

Question 4

What did Currie v Misa define consideration as?

Answer 4

‘Some right, interest, profit or benefit’ which is given to one party

Question 5

What is excuted consideration?

Answer 5

Consideration has already been carried out

Question 6

What is executory consideration?

Answer 6

Consideration will be performed in the future

Question 7

Intro AO3

Answer 7

P - Although criteria is vague, it is clear as judges determine it
DP - Ensures outcomes are fair as both parties are mutually treated the same, lowers the possibility of one party taking control of other
WDP - However, encourages judicial creativity

Question 8

What will the courts ensure both parties have done?

Answer 8

Exchanged something of value

Question 9

When will the courts not interfere?

Answer 9

If one party has made a bad bargain

Question 10

What must consideration be?

Answer 10

Real, it must exist

Question 11

Thomas v Thomas

Answer 11

Facts: Mrs Thomas had a contractual agreement with husband that she could continue to live in family home after his death for £1 per year
Held: Though it was a nominal amount, was valid consideration

Question 12

Thomas v Thomas AO3

Answer 12

P - Courts will agree agreement exists and enforce it when parties give something on basis of agreement, upholds wishes of both parties/ freedom of contract
DP - Increased confidence in justice system by lay people of courts follow through with agreements made
WDP - However, difficult to prove what was said if one party of contract dies

Question 13

When are the courts likely to find consideration?

Answer 13

If what is being exchanged has some value

Question 14

Chappel v Nestle

Answer 14

Facts: Nestle ran promotion that allowed consumers to send chocolate wrapper in return for record
Held: Wrappers were valid consideration as they had economic value

Question 15

Chappel v Nestle AO3

Answer 15

P - Judicial creativity
DP - Conflicts with 3P’s
WDP - No value as people throw them in bin

Question 16

White v Bluett

Answer 16

Facts: Son owed father money, when father died, claimed that they agreed if son stopped complaining, debt would be wiped, son stopped complaining
Held: Stop complaining is not consideration, son had to pay debts, father natural love and affection was not valid consideration

Question 17

Ward v Byham

Answer 17

Facts: Father agreed to pay £1 a week to mother of daughter to contribute to her upbringing, failed to make payments, claimed mother had duty to maintain child herself
Held: Valid consideration, mother provided consideration through natural love and affection and happiness for child so father had to pay

Question 18

Is past consideration valid consideration?

Answer 18

Nope

Question 19

What does past consideration state consideration has?

Answer 19

No value if occured before agreeement is made

Question 20

Re McArdle

Answer 20

Facts: Family members repaired aspects of house, other family members signed saying thye would contribute to repairs, agreement signed after work was carried out, never paid money
Held: Past consideration has no value, money couldn’t be recovered

Question 21

What are the exceptions to past consideration?

Answer 21

Implied promise to pay
Matter is important

Question 22

Re Casey’s Patent

Answer 22

Facts: Manager was promised 1/3rd share in patents, company refused to pay claiming it was past consideration
Held: Implied from when he began to work he would receive some kind of payment, was an exception to rule of past consideration

Question 23

Implied promise to pay AO3

Answer 23

P - Cases aren’t different enough to justify different outcomes, rule and exceptions aren’t known by many lay people
DP - Rely on legal advice, expensive
WDP - Judges are experienced

Question 24

Lampleigh v Braithwait

Answer 24

Facts: Braithwait about to be hanged for murder, requested friend to obtain pardon from King, he did it. Braithwait never paid him, claiming it was past consideration
Held: Important matter, fair for Lampleigh to presume he would be paid, wasn’t past consideration, Braithwait had to pay

Question 25

If there is already a pre-existing requirement for something to be done, will it be valid consideration?

Answer 25

Nope

Question 26

Stilk v Myrick

Answer 26

Facts: Crew members agreed to set sail for £5 per month, 2 left, workers did extra work on basis they would be paid share of collagues wages
Held: No consideration by crew members, they agreed to act in emergencies so was a pre-existing duty

Question 27

What will be valid consideration with pre-existing duty?

Answer 27

If extra element is provided

Question 28

Hartley v Ponsonby

Answer 28

Facts: 19/36 crew members remained, promised to be paid wages of deserted crew members
Held: Extra amount of work due to reduction in crew members, was valid consideration, had to be paid extra wages

Question 29

Pre-existing duty AO3

Answer 29

P - ‘Extra is undefined’, subjective from judge to judge
DP - Lawyers
WDP - S v M is justified, prevent floodgates opening, frivolous claims overwhelming courts

Question 30

If one party allows other to avoid detriment what will they have likely provided?

Answer 30

An ‘extra’ element

Question 31

If one party allows other to avoid detriment, will it be valid consideration?

Answer 31

Yus

Question 32

Williams v Roffey

Answer 32

Facts: Williams underquoted, Roffey had to get it finished in time, otherwise would get fine, Roffey offered Williams an extra £10,300 as incentive to finish on time, never paid it
Held: Williams consideration was completing work, allowing Roffey to avoid fine

Question 33

Detriment AO3

Answer 33

P - Subjective, judicial creativity
DP - SOP
WDP - Didn’t do extra work, shouldn’t be paid extra