Consideration

• Consideration is defined as the exchange of things with economic value.
• Promisor


  The party making the promise.
• Promisee


  The party receiving the promise.
• The rules of consideration:

  1. Must be sufficient, but does not need to be adequate.
  2. Must not be given in the past.
  3. Performing an existing duty is not good consideration.
  4. Must move from the promisee.
• Rule 1: Must be sufficient, but doesn't need to be adequate.


  The things exchanged must have some economic value but do not need to be equal.
• Chappell v Nestle Co [1960]


  The chocolate bar wrappers increased sales, therefore they had economic value.

  Sufficient but need not be adequate.
• Thomas v Thomas [1842]


  The right to live in the house in exchange for £1 a year.

  Sufficient but need not be adequate.
• Jones v Padvatton


  Giving up something of value can count as good consideration.
• White v Bluett [1853]


  Love and affection is not good consideration.
• Rule 2: Past consideration is not good consideration


  Consideration given cannot come before an agreement was made.
• Re McArdle [1951]


  Past consideration is not good consideration.
• Exception to the past consideration rule: Implied promises

  1. Importance of performance
  2. Commercial settings
• Lampleigh v Braithwait [1615]


  Importance of performance is an implied promise.
• Re Casey's Patents [1892]


  In Commercial Settings there is an implied promise to pay.
• Rule 3: Performing an existing duty is not good consideration 


  Promising to do something you already have to do doesn't have value.

  Types of duty:

  • Legal
  • Contractual
• Collins v Godefroy [1831]


  Police officer was under a legal obligation to appear in court.

  Doing an existing legal duty is not good consideration.
• Glasbrook Bros v Glamorgan County Council [1925]


  Police protected miners and lived on site.

  Distinguished from Collins v Godefroy.

  Going beyond an existing legal duty is good consideration.
• Stilk v Myrick [1809]


  Sailors did the work of 2 crew members.

  Doing an existing contractual duty is not good consideration.
• Hartley v Ponsonby [1857]


  Distinguished from Stilk v Myrick.

  Sailors did half the crew’s work.

  Going beyond an existing contractual duty is good consideration.
• Williams v Roffey Bros [1991]


  C allowed D to avoid penalty fee and hassle

  Doing an existing contractual duty is good consideration if it provides practical benefits.
• Scotson v Pegg [1861]


  An existing contractual duty with a third party can be good consideration for further agreements.
• Rule 4: Consideration must move from the promisee


  A contract is private to the parties who have given consideration.
• Tweddle v Atkinson [1861]


  Consideration must move from the promisee.
• Economic value


  Worth of something can be measured by a monetary figure
• Ward v Byham [1956]


  Lord Denning ignored White v Bluett.

  Love and affection was good consideration.