Law- seminar 3- Consideration

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  • Created by: Heather
  • Created on: 13-04-17 20:27
What case defined what consideration is?
Currie v Misa
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What did currie v misa define consideration as?
"some right, interest, profit or benefit...or... some forbearance, detriment, loss or responsiblity.
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How important is consideration?
Consideration embodies the idea of reciprocity in contracts an generally a contract devoid of consideration is unenforceable in court,
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How did dunlop v Selfridges define consideration?
Defined as "an act or forbearance of one party, or the promise thereof, which is the price for which the promise of the other is bought.
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Describe the Dunlop v Selfridges case.
Dunlop sold tyres to a distributor, under the agreement that they would not be sold to consumers at a price blow their list price. A retailer, who purchased from the distributor, sold the tyres at a price below the list price.
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What did the court decide?
No enforcement- Dunlop was a third party to the contract between the retailer and distributor,
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What are three elements of consideration?
-benefit or detriment, -Given in return for a promise, -Must move from the promisee
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Consideration need not be adequate but must be what?
Sufficient,
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What two cases are used to prove this?
1) Chappell v Nestle, 2)Haigh v Brooks
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Describe chappell v nestle.
Chocolate bar wrappers were held to be part of the consideration for the sale of a record,
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Describe Haigh v Brooks and what did the court decide?
The consideration of a promise to pay certain bills, was the surrender of a document which was a guarantee , but later turned out to be worthless. It was held that it was still good consideration and the promise was enforceable.
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For consideration must be real, what case is used?
White v Bluett
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Describe the Whtie v Bluett case?
A son was sued on a promissory note by his father's executors, and he alleged that his father had agreed to discharge him from liability if he stopped complaining his brothers enjoyed more privileges.
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What did the court decide?
It was held that the son's promise was no more than a promise not to bore hsi father and was too vague to form consideration for the father's promise to waive his rights under the promissory note,
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What performance of what duties can't amount to consideration?
The performance of a legal duty or public duty cannot amount to consideration,
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What two cases are used to show this?
Ward v Byham, 2) Shadwell v Shadwell
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Describe the Ward v Ward case.
It was held that there was consideration for a promise to pay a weekly sum to the mother of an illegitimate child if the mother proved that the child was well looked after and happy.
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What did the court decide?
The court held that the mother was going beyond her statutory duty to maintain the child
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What was decided in the shadwell v Shadwell case?
Consideration which consists of the performance of an existing contract with a third party may be good consideration,
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Generally where a promisee merely undertakes to fulfil an existing contract with the promisor, will it be held theres good consideration?
No
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This position was shown in which case?
Stilk v Myrick
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Describe the Stilk v Myrick case?
Claimant was a seaman on a voyage. He was paid £5 per month. During the voyage 12 of the crew deserted. Captain promise remaining crew that if they worked the ship undermanned as it was, he would divide the wages. The claimant agreed but not upheld
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What did the court decide?
The claimant was under an existing duty to work the ship back to London and undertook to submit to all the emergenices that entitled. He therefore couldn't provide consideration for the promise of extra money,
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However, are there instances where the promise to perform an existing contractual obligation be sufficient consideration, especially if what?
-Yes, there are instances, -Especially if damages for breach of contract would not fully compensate,
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Give an example of a case where practical benefit counts as consideration?
Williams v Roffey Bros
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Describe the Williams v Roffey Bros?
Contract formed with Roffey and 3rd person to refurbish a block of 27 flats and sub-contracted carpentry to Willliams for £2000- Completed 9 flats but got into difficulties. R paid addition £10,300- 8 more completed, further payment of £1500, W sued,
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What did the court decide?
The court thought R had obtained a practical benefit (which amounted to consideration) in william's continued performance and the avoidance of the penalty under the main contract
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What is another point related to the issue that performance of an existing duty is not consideration is what rule?
The rule that part-payment of a debt in satisfaction of the whole debt is not good consideration,
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What case is this rule shown with?
Pinnels case
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Describe Pinnel's case.
The claimant was owed £8 10 shillings. The defendant paid £5 2 shilllings 2p. The claim sued for the amount.
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What did the court decide?
Claimant was entited to the full amount even if they agreed to accept less. Part payment of a debt is not valid consideration for a promise to forebear the balance,
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What case reaffirms this idea?
Foakes v Beer
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Describe Foakes v Beer?
F owed B £2090 as a judgement and B agreed that if F would pay her £500 in cash and £1590 in instalments, she wouldn't take any procedings. F paid the money but B claimed an additional £360.
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What did the court decide?
The court held that there was no consideration for this promised and F remained bound to pay the additional sum,
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However, how does tis rule change with a debt from a third party
Where a debtor obtains part payment of his debt from a third party he cannot later recover the balance from the debtor,
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This was established in what case?
Hirachand Punamchand v Temple
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Describe Hirachand Punamchand v Temple
C money lenders in India- Lent money to army officer serving in India. C sought return of the money but unable to get response so contacted his father- Paid substantial amount but not full but C didn't send promissory note relating to son's debt
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What did the court decide?
The payment made by the father was sufficient to discharge the full balance. Where the person making the payment in return for discharging debt owed by another is good consideration,
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Past consideration is not what? When does this occur?
-Not good consideration, -This occurs when a promise is given after the fact of the transaction
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What case is used to show this?
Roscoria v Thomas
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Describe Roscoria v Thomas.
Where the plaintiff purchased a horse from the defendant and the defendant later gave a warranty that the horse was sound an free from vice. The horse was actually a vicious horse.
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What did the court decide?
It was held that the warranty was independent of the sale since it had only been given after the transaction was concluded and there was no consideration for the warranty, making it unenforceable,
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What are the two exceptions to the past consideration rule?
1) Previous request of the promisor 2)Antecedent debt
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For the previosu request of the promisor, how is this an exception to the past consideration rule?
A past consideration will support a later promise if the past consideration was given at the request of the promisor and was assumed at the time the past act was performed that it would ultimately be paid for,
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For antecedent debt, how is this an exception to the rule?
The existence of an existing debt is sufficient consideration for a subsequent promise to pay that debt but there must also be present consideration in the form of forbearance,
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Where a contract has been obtained by duress, why is it voidable?
Although it is a valid contract when it is made, the person wronged has the right to set it aside retrospectively if they wish,
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This can occur with illegitimate pressures such as what? What case described this?
"Threats to life or limb, or to property"- Universe Tankships of Monrovia v International Transport Workers Federation,
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What is the exception to the requirement for consideration in limtied case?
Promissory estoppel
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What is promissory estoppel?
If a party to a transaction makes a promise that it will not insist on its strict legal rights, and other person acts in reliance on this promise, then the first party will not be allowed to back out, it would be unfair to do so,
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What is the leading case on promissory estoppel?
Hughes v Metropolitan Railway Co.
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Describe Hughes v Metropolitan railway.
Landlord gave tenant 6 months notice to carry out repair or it would end the lease. Landlord and tenant then entered into negotiations for tenant to purchase the freehold of the property. However negotiations broke down and repairs no made,
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What did the court decide?
Time limit imposed for carrying out repairs was suspended. -"negotiation which has the effect of leading one of the parties to suppose that the strict legal rights arising under the contract... will be kept in suspense...,"
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Promissory estoppel thus affects what relationships between parties and an example case?
-Future relationships between parties, -Central london property trust v high trees house
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Describe the Central ondon property v high tree house case
High Trees leased a block of flats from CLP in 1937. Defendant had difficulty in getting tenant for all the flats and so no profit. In 1940, many of flats still empty due to war. CLP agreed to reduce the rent during war years,-After wanted to return,
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What did the court decide?
The rent would not be returned to the originally agreed price for the future only, CLP couldnt claim back the arrears accrued during the war years.
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What are the four scopes of the principle?
1)Promise must be clear and unequivocal, 2) Must be inequitable or unfair to go back on the promise, 3) Alteration of position, 4) It suspends but doesn't extinguish the promisor's rights,
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For must be inequitable or unfair to go back on the promise, what case is shown with this?
d and C Builders v Rees
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Describe the D and C Builders v Rees case.
Here Rees owed a small building company £482 for work they have done for him. He delayed payment for several months and offered £300 instead, stating they could take that or nothing. D and C had financial problems so accepted and sued for balance.
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What did the court decide?
The court held it wouldn't be inequiable for D and C to go back on its promise as the settlement was not voluntary, so Rees had to pay the balance,
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For alteration of position, what does this mean?
The promisee must have altered his position in reliance on the promise made,
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For the idea that promissory estoppel suspends but doesn't distinguish the promisor's rights, what can the promisor do with the contract?
The promisor may be given notice resume or insist on the rights which have been waived and revert to the original terms of contract,
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While Promissory estoppel can be used to eliminate the necessity of consideration, when can't it be used?
to eliminate the requirement for consideration where the parties are not in a contractual relationship,
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Describe Combe v Combe.
A husband upon divorce promised his wife a permanent allowance of £100 a year in return for wife not appealing for maintenance. Husband failed to make the payments and the wife sued him,
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What did the court decide?
Held that there was no consideration for the promise as the wife's forbearance has not been requested nor was it in return for the promise made to her nor could she rely on promissory estoppel- No contract there,
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For the doctrine of proprietary estoppel, when does this arise?
Where a person acts in reliance and to his detriment on the belief that he will acquire rights in and over the property of another in circumstances where it is unconscionable for the property owner to deny the rights,
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Give an example case?
Pascoe v Turner
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Describe Pascoe v Turner.
Turner- A widow- Went to live with partner Pascoe as housekeeper. He left to live with another woman, but assured Turner the house and contents were hers so she lived there and with his knowledge spent her money on repairs. However turner asked to le
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What did the court decide?
Held there had been a gift of the contents, but an imperfect gift of the house- There was no conveyance but ordained a conveyance of full title in the house for her.
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Card 2

Front

What did currie v misa define consideration as?

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"some right, interest, profit or benefit...or... some forbearance, detriment, loss or responsiblity.

Card 3

Front

How important is consideration?

Back

Preview of the front of card 3

Card 4

Front

How did dunlop v Selfridges define consideration?

Back

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Card 5

Front

Describe the Dunlop v Selfridges case.

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