Practical Benefits Test

• 1. A and B must be in an existing contract to perform a service or supply goods and
• 2. Before B competes his obligations under the contract, A has reason to doubt that B will complete his end of the bargain and
• 3. promises to give more to B and
• 4. A obtains a 'practical benefit' or avoids disadvantage
• 5. A's promise to pay is not as a result of economic duress
• If all of the above is satisfied there is a binding agreement. You must look at the practical benefits received by the party making the promise