Contract 1 Consideration

•Referred to as a badge of enforceability•It is mutuality of agreement, something be lost or gain by both the promisor/promissee (Currie v misa – detriment or forbearance suffered by promisor and promissee)•Benefit or detriment is the consideration, thus it must be valuable•One sided promises amount to gift, something has to be passed (Dunlup v Selfridge – nothing was passed from the promisee)•When consideration is not obvious, equity is use through estoppel (eringthon v eringthon – father died after having bought and promised his son and his wife that he would transfer property in their name if they kept up mortgage payments. Other family members tried to take the house but was estopped because they were paying the mortgage ).

Executory Consideration – future promises to do something like for example supplying goods for future performance

• Re McArdle – where it was suggested that in consideration for carrying out alterations (though all the work on the house had been completed at the time the document was signed).

Executed –similar to a unilateral contract where one person makes a promise for when the act is completed.

• Carlill v Carbolic smokeball company

Types of consideration

Must not be past – A gives b a ride and upon arrival B promises to give A money for petrol. Promise not enforceable since the ride had already happened:

• (Re MCardle, Plaintiff carried out work refurbishing a house that his siblings had beneficial interest. He asked them to contribute towards the cost, but this was not enforceable because work was completed before any promise of payment was made.

Exception: Act constituting consideration must be done at the promisor’s request

• Lampleigh V Brathwaite – B killed a man and asked Lh to get him a pardon for a fee. Previous request and subsequent promise was treated as the same transaction

Rules of Consideration 1

Must be sufficient, need not be adequate: having value means it is real/sufficient • Chapple v Nestle – special offer being made to obtain a

record with three wrappers, copyright was owned by nestle who claimed breach, the wrappers represented sufficient consideration – courts not concerned whether the deal was bad)

Must move from the promisee – to enforce something must be provided• Tweddle v Atkinson – Father of a bride and groom

promised to give them some money after they were married and he died. Son sued the executor but was unsuccessful because there was no consideration and he was not a party to the contract.

2& 3

Performance of pre-existing duty – eg public duty contrast with a person exceeding his duty

• Collins v Godfrey – persons being paid to go testify when he had already been subpoena thereby having a legal duty to do so

Glassbrook v Glamorgan CC – Officers protecting striking minors but was asked to stay on the premises. They had a duty to perform but they are entitled to determine how that duty would be performed.

4

Existing contractual duty – already bound under a contract

• Stilk v Myrick-two sailors abandoned a ship and the captain agreed to pay the others if they would sail the ship back – unenforceable as they were already legally bound to do so and making a promise to sail back was not valid consideration

Williams & Rofley redefined this principle to say that if in the bargaining consideration their is a practical benefit (eg getting some additional benefit – in this case Roffley would get a chance of the completion of the project on time (performance) and Williams would get an additional payment)

5

Pinnel’s Case – P was owed some money and the def paid a part of debt. This did not amount to valid consideration unless at the promisor’s request it is made 1) before the due date; 2) with a chattel; 3) to a different destination

• Exception: if something new is introduced into the relatinship it will be binding.

Contract variation - Stilk v Myrick-two sailors abandoned a ship and the captain agreed to pay the others if they would sail the ship back – unenforceable as they were already legally bound to do so – contract could not be varied• Williams & Rofley redefined this principle to say that if in

the bargaining consideration their is a practical benefit (eg getting some additional benefit – in this case Roffley would get a chance of the completion of the project on time (performance) and Williams would get an additional payment)

Part payment of a debt (party duty bound to pay)

6 &7

Equitable doctrine design to stop a person from going back on his promises not supported by consideration• High Trees case – deals

with the modification of rent payable during the second world war and the promise to accept part was to accommodate the circumstances of the war and the principles in Pinnel’s case applied

Lord Denning set the following principles: a

promise intended to be binding,

intended to be acted on, in fact

acted on, is binding in so far as its terms

properly apply

Requirements:• A pre existing

contract/legal obligation

• Unambiguous promise

• Change position• Must be equitable

for promisor to go back on his promise

Promissory Estoppels

Pre-existing contract/legal

obligation

•Combe v Combe – a husband promising to maintain wife. Not enforceable as estoppel was being used as a sword and not a shield

Clear unambiguous

promise

•Promisee relied on the promise which provides the justification for enforcement - Hightrees

Change position -

•Promise is usually intended for the duration of the contract, however under estoppel the promise may be limited. Hightrees – the promise of the reduced rent is only good while the second world war continued.

Must be inequitable for the promisor to go back on his promise

•Baird v spencer – Plaintiffs sued Spencer for stopping them from supplying clothes for them for years , though there was no express contract. It failed as there was no certainty of contract and estoppel could not create its own cause of action and provide a remedy