Topic 2: Consideration Flashcards
(40 cards)
Define ‘contract’
An arrangement that creates obligations that can give rise to an action for breach of contract
What is the presumption in domestic/social agreements?
What is the case for this?
That there was no intention to create legal relations
Balfour v Balfour (1919)
What test was set out in Merritt v Merritt (1970) with regards to agreements in domestic/social situations?
The ‘reasonable person’ test, i.e. would reasonable people regard the agreement as intended to be binding?
What is the presumption in commercial agreements?
That the parties did intend to create legal relations
Define ‘consideration’
‘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’ (Currie v Misanthropist (1875))
What did Chappell & Co v Nestle Co Ltd (1960) establish?
That parties can stipulate for whatever they wish; whether something is legally sufficient consideration does not depend on whether it is a fair exchange for the other party’s promise
Briefly outline the facts of Chappell & Co v Nestle Co Ltd (1960)
As an advertising promotion for its chocolate, Nestle promised to give a record to anyone who sent in three chocolate wrappers
This was legally sufficient consideration because the people sending in the wrappers had to collect them which promoted the sale of Nestle’s chocolate
Nestle had therefore received sufficient ‘benefit’ from the wrappers
Must consideration be of any economic value?
Yes
Which case demonstrates the expression ‘consideration must be sufficient but need not be adequate’?
White v Bluett (1853)
Briefly outline the facts of White v Bluett (1853)
In return for a father forgiving his son a debt, the son promised his father to stop complaining
This was not sufficient consideration because the son didn’t have the right to complain in the first place so he hadn’t given anything up
What principle does Coombe v Coombe (1951) set out?
That a promise must be motivated by the price and the price by the promise for consideration to be sufficient
Briefly outline the facts of Coombe v Coombe (1951)
Wife promised not to sue for maintenance and husband promised his wife some money
However, he did not make his promise in return for the promise of his wife (they were made independently), so this was not sufficient consideration
Define ‘past consideration’
When the promise to pay comes after the act which purports to be consideration for the promise
Is past consideration sufficient consideration?
No
What is the case for past consideration?
Re McArdle (1951)
Briefly outline the facts of Re McArdle (1951)
Mrs McArdle carried out improvements to a house belonging to someone else
After all the improvements had been done, the owners of the house put in writing that they would pay her for the improvements ‘in consideration of [her] carrying out alterations and improvements to the property’
Mrs McArdle tried to claim this money but the promise to pay was not enforceable
Her consideration for the promise to pay was ‘wholly past’ so there was no bargain element
Define ‘unexpressed bargain’
When an act is requested by the other party where payment is not discussed, but in circumstances where there would not normally be a gift
What are the three cases for unexpressed bargains?
Re Casey’s Patents (1892)
Lampleigh v Braithwait (1615)
Pao On v Lau Yin Long (1980)
Briefly outline the facts of Re Casey’s Patents (1892)
Casey owned some patents and Stewart worked to obtain some rights for him
After he had done so, Casey promised Stewart a payment
Casey later argued that this promise was unenforceable for want of consideration i.e. Stewart’s act was past
Court upheld the bargain because it was clear from the facts that the parties always understood that Stewart would be paid for his work on the patents
Casey’s later promise merely verbalised this unexpressed understanding
Briefly outline the facts of Lampleigh v Braithwait (1615)
Braithwait was convicted of killing a man and requested that Lampleigh get him a pardon from the King, which he did
Braithwait then promised to give Lampleigh £100, but then refused to pay
Court held that the promise to pay was enforceable because Lampleigh obtained the pardon at the request of Braithwait, which carried the understanding, unspoken at the time, that payment would be made for this service
What is the principle established in Pao On v Lau Yin Long (1980)?
‘The act must have been done at the promisor’s request [and] the parties must have understood that the act was to be remunerated further’
Is performance of an existing public duty sufficient consideration?
What are the three cases that show this?
No, unless the claimant’s performance offers something extra and goes beyond the existing public duty
Collins v Godefroy (1831)
Glasbrook Bros Ltd v Glamorgan CC (1925)
Harris v Sheffield United Football Club Ltd (1987)
Briefly outline the facts of Collins v Godefroy (1831)
A witness was due to give evidence in court and someone promised to pay them if they did
This payment was unenforceable
Briefly outline the facts of Glasbrook Bros Ltd v Glamorgan CC (1925)
During a miners’ strike, the owner of the colliery asked police to provide extra security
This payment was enforceable because the police had to go above and beyond their existing duty
