Consideration
- Created by: Stevie Cooper
- Created on: 22-05-18 01:14
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- Consideration
- Common law test of enforceability for simple contracts.
- Past consideration.
- When a promisor offers a reward after the promise has embarked upon their performance.
- Not good consideration.
- When a promisor offers a reward after the promise has embarked upon their performance.
- Mutual exchange under which one party must suffer a detriment or a benefit as a result of what is promised or given under the contract.
- Can be good consideration
- Only a party that has provided consideration can enforce the promise.
- Must have some economic value in order to be legally sufficient.
- Promise to perform act which carries no economic value will not be sufficient, therefore not good consideration
- White v Bluett
- Promise to perform act which carries no economic value will not be sufficient, therefore not good consideration
- Must be sufficient but not adequate.
- Courts role isn't to protect a party from a bad bargain.
- Thomas v Thomas - widow promised she could live in matrimonial home if she paid £1 ground rent and maintained property.
- Courts role isn't to protect a party from a bad bargain.
- Consideration must move from the promise.
- As it is the promise who wants to enforce the promise, it makes sense for them to provide justification for allowing them to do this.
- The Contracts (Rights of Third Parties) Act 1999
- As it is the promise who wants to enforce the promise, it makes sense for them to provide justification for allowing them to do this.
- Performance of existing duties - bad consideration.
- Performance of an existing public duty - performance of duty required by law is not valid consideration.
- Collins v Godfroy - promise was made to pay witness for giving evidence at trial. Not enforceable as party was required to give such evidence by law.
- Performance of an existing public duty - performance of duty required by law is not valid consideration.
- Performance of existing contractual duty owed to the same promisor.
- If parties wish to change agreements of existing contract, fresh consideration will need to be created in order for changes to be enforceable.
- Stilk v Myrick - captain promised crewmembers a split of the wages of deserters. Crewmembers provided no consideration therefore promise was not enforceable.
- Exceeding an existing contractual duty - good consideration.
- Hartley v Ponsonby - similar facts to Stilk v Myrick, but in this case the captain offered crew money to sail home. The crew sailing home counted as consideration.
- If parties wish to change agreements of existing contract, fresh consideration will need to be created in order for changes to be enforceable.
- Glidewell criteria.
- if A has entered into a contract with B to do work for/supply goods/services to B, in return for payment by B.
- at some stage before A has completely performed his obligations under the contract B has reason to doubt whether A will/will be able to complete his side of the bargain.
- B thereupon promises A an additional payment in return for A's promise to perform his contractual agreement on time; and
- as a result of giving his promise, B obtains in practice a benefit, or obviates a disbenefit; and
- B's promise is not given as a result of economic duress or fraud on the part of A; then
- the benefit to B is capable of being considered for B's promise, so that the promise will be legally binding.
- Performance of duty owed to a third party.
- party promises payment in return for the other party to perform a duty they are already under an obligation to perform to a third party.
- Shadwell v Shadwell - uncle promises nephew £150 per year to marry his fiance, no contract between uncle and fiance. fiance = 3rd party.
- party promises payment in return for the other party to perform a duty they are already under an obligation to perform to a third party.
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