formation - consideration

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  • Created by: TashaChlo
  • Created on: 06-12-14 20:54

Consideration

consideration is what passes from one contractual party to another, each party in a contract must give something of value

'the price for which a promise is bought'

'some right, interest, profit benefiting one party and

a loss or responsibility undertaken by the other party'

each value must be something of value e.g. sell car – get money

must be sufficient but need not be adequate i.e. real, tangible and has some value

Chappel v Nestle

Nestle was running a special offer – free cd for wrappers 'some value as represented profit from chocolate bought.

  • Must not be vague – White v Bluett – a sons promise not to bother or pester his father any more in exchange for being released from debt – court held too vague

Executory consideration

consideration has yet to be performed, exchange of promises to perform acts in the future. E.g. order car/order accepted

Executed consideration

when act is completed – when you've performed your obligation e.g. car delivered/payment made

Past consideration

Act already completed when promise made. E.g. Alex gives Ben a lift home in car, on arrival Ben promises to give Alex £5 petrol money.. not legally binding.

Rule: it cannot operate as consideration – it is not valid consideration

Re McArdle

held: court could not insist on payment as work had been done before the promise of payment made – not valid consideration as in past the other party is not receiving anything as the work is…

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