Consideration

• Definition

  • an exchange of promises
  • Currie v Misa- right or interest to one party in exchange for something of value from another
• Types

  • executory consideration- future acts
  • Executed consideration- after acts have been performed
• Consideration must not be passed

  • if one party performs an act and afterwards they promise something in return- consideration is past
  • Re McArdle
• Exceptions to this rule

  • previous request- Lampleigh v Braithwait, if promisor had previously asked for the goods or services, promise made after bill be binding
  • Business situations- Casey's Patents, if understood by both sides that it will be paid- consideration is valid
• Consideration must be sufficient but need not be adequate

  • deal must have some value but doesnt need to be equal
  • Chappell and Co Ltd v Nestle Co Ltd, consideration even with minimal value
• Forbearance to sue

  • if a person has a valid claim but promises to forbear from enforcing it, if the other party promises to settle the claim that is valid consideration
  • Alliance Bank v Broom
• Existing Public Duty

  • if someone is under a public duty to do something, then promising to do that is not consideration- Collins v Godefroy
  • But if it exceeds their duty, then it may be valid consideration- Glassbrooke Bros v Glamorgan County Council
• Existing contractual duty

  • if someone promises to do something they are already bound to do under a contract, that it not valid consideration
  • Stilk v Myrick
  • But if the performance of a practical benefit on the other party then it can be seen as valid consideration- Williams v Roffey Bros Ltd
• Part payment of a debt

  • Pinnels case- part payment of a debt is not good consideration
• Exceptions to that rule

  • if creditor agress to part payment on an earlier date than the due date
  • If a part-payment of the debt was made by a third-party, Hirachand Punamchand v Temple