Past consideration

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  • Past consideration
    • This is where the promisor requests that the promisee performs a service without any mention of payment, the promisee duly performs that service, and the promisor promises to pay the promisee a stated sum for performing it.
    • This is a common-sense rule as it prevents people from being forced into contracts on the basis of them being sent goods or services which they haven't ordered. It is a promise which has not been agreed by both parties.
    • Case example - Re McArdle (1951)
      • In this case a son and his wife lived in his mother's house that on her death would be inherited by her son and 3 other children. The son's wife paid for substantial repairs and improvements to the property.
        • The mother then made her 4 children sign an agreement to reimburse the daughter-in-law out of her estate. When she dies and the children refused to keep this promise, the daughter-in-law sued unsuccessfully.
          • The courts held that this agreement wasn't enforceable as the work had been completed before any agreement to pay had been made.
            • The promise to pay wasn't supported by any consideration and the work was therefore 'past' consideration and not valid.
    • Consideration cannot come before the agreement is formed. Consideration must be given in return for the promise or act of the other party. If 1 party has completed performance before the other offered consideration, this is called past consideration and cannot be enforced.

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