Consideration is a topic of contract law and is part of formation of a contract

  • Created by: Tiffany
  • Created on: 28-11-11 16:10




Consideration is “the price for which the promise of the other is bought”

-Must pass between parties.


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                Existing duty not good consideration

- (Legal duty)

Except when something extra

                Non-existing obligation

- (Contractual Duty)

-Except when 3rd party interested

-Except when something extra is added

- Agency

    -why (evaluation)>it makes practical sense as the agency has skills and expertise.

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Past consideration is not good consideration

-except where a service is requested


-Implied Payment


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Consideration must not be adequate but must be sufficient

Sufficient = something

Not equal

Something = tangible; value


The right to sue requires consideration


Part-payment is insufficient

-except in a different form.


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a.       Existing obligation not good consideration because…

                i.       (Contractual) so parties cannot escape obligations/demand extra.

              ii.      (Legal) so that people carry out public duty properly.

b.      Why there are so many exceptions

                i.      A party should get paid for doing extra.

              ii.      & the other party should NOT be able to escape payment.

             iii.      Parties should pay for an extra benefit.

c.       It stops parties gaining a benefit when they have not put anything into the contract.

d.      Need not to be adequate…

                i.      Because it is up to the two parties to make their own decision.

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e.      Part-payment …

                i.      No certainty that anyone would pay their debt.

¨       Except: their different form

              ii.       Still paying

f.        Past-consideration…

                i.      Party has not asked for it.

g.       Some have argued that it is in need of reform as there is no statutory implementation.

h.      Uncertainty as there is several exceptions so hard for lawyers. But it is flexible which allows the doctrine to avoid injustice. But judges can distinguish a precedent.

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