consideration

• consideration is essential for every valid contract. Meaning both parties to a contract will give something to the other by way of exchange. Defined in the Currie V Misa case.
• executed consideration- an act in return for a promise
• executory consideration- a promise for a promise
• rules of consideration:

  • consideration need not be adequate but must be sufficient
  • past consideration is not good consideration
  • consideration must move from the promisee
  • performing an existing duty isn't new consideration
  • a promise to accept part payment of a pre existing debt in place of a whole debt isn't consideration
• consideration need not be adequate but must be sufficient:

  Chappell V Nestle- adequacy, law doesn't concern itself with equivalence of consideration.

  White V Bluett- sufficiency. Consideration must be real and have some value.
• past consideration is no consideration:

  Re McArdle

  There is en exception when there is the promisor’s express or implied request for a particular task and there must be an implied understanding that the task should be paid for - Re Casey’s Patent
• must be all of the following for these exceptions to apply for past consideration exception:

  • an express or implied request by the promisor to the promised to perform a task
  • an implied promise inherit in the request that the promisor will pay the promisee a reasonable sum
  • performance of the task
  • payment of the money by the promisor to the promisee
• consideration must move from the promisee:

  a person cannot sue or be sued under a contract unless he or she has provided consideration for it.

  Tweddle V Atkinson
• performing a pre existing duty cannot be the consideration for a new contract:

  can occur in 3 ways

  • a duty imposed by a public duty to act
  • a duty imposed under an existing contract with the promisor
  • a promise to make payment of an already existing debt
• obligation under an existing contract: Stilk V Meyrick
• if there is an extra element required for the new payment there is consideration. - Glasbrook Bros
• more modern examples: Williams V Roffey Bros

  Show that there may be consideration if there is a benefit to the person even if it’s a pre existing obligation.
• a promise to accept part payment of an existing debt in place of the whole debt is not consideration:

  Arises from Pinnels case. A creditor is able to claim the remainder of a debt even if they have agreed that part payment is enough.

  Rules was confirmed in Foakes V Beer
• 2 exceptions to Pinnels rule:

  • principle of accord and satisfaction where there is am agreement to end a contract and satisfaction that has been acted upon voluntarily.
  • doctrine of promissory estoppel meaning if one party to an existing contract agrees to vary the contract, the promisor cannot go back okay the agreement.
• limitations to the doctrine of estoppel:

  • can’t be used to found a new contract
  • promisee must have relied on their detriment to the promsie
  • may only suspend rights not extinguish the rights of the promisor
  • must show they behaved equitably
• promissory estoppel: Central London V High Tree Houses