Consideration

Chantal Briancon
Flashcards by , created over 3 years ago

LLB Contract Law Flashcards on Consideration, created by Chantal Briancon on 04/25/2016.

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Chantal Briancon
Created by Chantal Briancon over 3 years ago
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Question Answer
What is consideration? Within a contract, a benefit and detriment must occur to each party and this is referred to as consideration. There are two forms of consideration - executed and executory consideration.
CURRIE V MISRA Defined consideration as 'consideration, in the sense of the law, may consist either in some benefit, interest or profit accruing to the one party or some forbearance, detriment, loss of responsibility that is suffered or undertaken by the other party'.
DUNLOP V SELFRIDGE Described consideration as 'An act of forbearance of the one party, or the promise thereof, is the price for which the promise of the other is brought, and the promise thus given for value is enforceable'.
What are the rules governing consideration? There are 5 main rules governing consideration.
Consideration must be sufficient but need not be adequate. The consideration that is provided by each party must be sufficient and therefore, must have some value. However, this value does not need to be adequate.
WHITE V BLUETT In this case, the consideration was deemed as being too intangible to be consideration.
THOMAS V THOMAS Established that as consideration only needs to be sufficient, even trivial acts or goods may amount to consideration. As long as the consideration has some value within the eyes of the law, this will amount to good consideration.
WILLIAMS V ROFFEY BROTHERS Consideration had been provided by the claimant conferring a benefit on the defendant by helping him avoid the penalty clause by completing the construction of time.
CHAPPEL AND COMPANY V NESTLE CORPORATION LIMITED In regards to the fact that consideration only needs to be sufficient, the courts held 'a peppercorn does not cease to be good consideration if it is established that the promisee does not like pepper and will throw away the peppercorn'.
The consideration must not be past. The consideration by either party cannot be past. If one party voluntarily performs an act and the other party then makes a promise, the consideration for the promise is said to be past.
Re MCARDLE The promise of payment came after the consideration. Therefore, this meant that consideration was past.
ROSCORLA V THOMAS As the promise that the horse was sound had come after the formation of the contract, the consideration was past. There was no good consideration and therefore, the promise is not binding.
LAMPLEIGH V BRAITHWRAIT Consideration will not be deemed as being past where the consideration is preceded by a request.
A existing contractual duty to act is not valid consideration. Where a party has an existing contractual duty to perform an act, this will not amount to valid consideration.
STILK V MYRRICK In this case, the claimant already had an existing contractual duty to ensure that the ship returned back to the land safely. Therefore, there was no valid consideration.
HARTLEY V PONSONBY The claimant had gone beyond his existing contractual duty and therefore, this amount to valid consideration.
WILLIAMS V ROFFEY BROTHERS The claimants had gone beyond their contractual duty by providing a practical advantage to the defendant - the claimants ensuring that they completed the work in a set time period to avoid the defendant facing a penalty clause. Therefore, this was valid consideration.
SCOTSON V PEGG An existing contractual duty owed to a third party to the contract can amount to valid consideration for a new promise.
New Zealand Shipping v Satterwraith Confirmed what was held in Scotson v Pegg.
An existing public duty will not amount to valid consideration. Where either party has an existing public duty to perform an act, this will not amount to valid consideration.
GLADSBROOK V GCC The police went beyond their existing public duty to protect the claimants from the strikers by providing extra police officers to man the area. Therefore, this was valid consideration and the officers were entitled to be paid.
COLLINS V GODFREY The claimant had an existing public duty to attend court as a witness. Therefore, this was not valid consideration and he could not be paid by the defendant for his duty.
WARD V BYTHAM The defendant had gone beyond her existing public duty by ensuring that her child was happy and well look after and therefore, had provided good consideration.
The consideration must move from the promisee. If a person other than the promisee is to provide the consideration, the promisee cannot enforce the agreement.
TWEDDLE V ATKINSON As the groom was not party to the agreement, the consideration did not move from him. Therefore, he could not enforce the contract.
Part payment of a debt is not valid consideration. Where one party owes money to another and agrees to pay part of the debt in full settlement, this part payment of a debt does not amount to valid consideration.
PINNEL'S CASE Established that part payment of a debt is not valid consideration. Therefore, the claimant may ask for the remaining debt to be paid at any time. However, part payment will be valid consideration if it is paid BEFORE THE DUE DATE, WITH A CHATTEL OR TO A DIFFERENT DESTINATION.
FOAKES V BEER The party was entitled to bring an action against the other party on the interest of the payment that he had made. The agreement amounted to a part payment of a debt and therefore, this was not consideration for a promise not to enforce the full amount price.