Consideration

• Consideration


  English law will not enforce a gratuitous or 'bare' promise. Consideration must be given to turn a promise into a binding contract.
• Consideration (definition)


  Dunlop v Selfridge: An act of forbearance of one party, or the promise thereof, is the price for which the promise of another is bought, and the promise given for value is enforceable.
• Rules of consideration


  • The consideration must be sufficient but need not be adequate
  • The consideration must move from the promisee
  • Existing contractual duty does not constitute consideration
  • Part payment of a debt is not consideration
  • The consideration must not be past
• Sufficient consideration


  • In Thomas v Thomas (1942) the courts found that the £1 nominal payment was 'sufficient' consideration
  • In Chappel v Nestle (1959) it was held that the 3 chocolate wrappers were sufficient consideration, even though they were then thrown away when received
• Consideration must move from the promisee


  • In Tweddle v Atkinson (1861) it was held that the person wishing to enforce the contract, must be part of it. Generally, third parties cannot enforce a contract.
• Existing contractual duty does not constitute consideration


  • However, performance of an existing contractual duty can constitute valid consideration if it confers a practical benefit on the other party (Williams v Roffey Bros (1990))
• Part payment of a debt is not consideration


  • In Pinnel's Case (1602) it was held that part payment of a debt can never satisfy the whole debt. Any agreement to accept part-payment in full satisfaction of the debt is unenforceable as there is no consideration. The creditor could always sue for the balance owed.
• Past consideration


  • If the act is performed before the promise is made, then the consideration is past, and the promise is not enforceable (Re McArdle (1951))
  • However, consideration will not be past if the original request for performance of services raised an implication that they would be paid for (Re Casey's patent (1892))
• In Chappel v Nestle (1959) it was held that the 3 chocolate wrappers were sufficient consideration, even though they were then thrown away when received
• In Central London Property Trust Ltd v High Trees House (1947) Denning established the doctrine of promissory estoppel, which prevented the landlords going back on their promise to accept a lower rent despite the fact that the promise was unsupported by consideration