Contract law

• Consideration


  Anything of value, which both parties (promisor and promisee) must agree to exchange to have a valid contract
• Lush LJ in Currie v Misa (1872): 'A valuable consideration in the sense of the law, may consist either in some right, interest, profit or benefit accruing to one party or some forbearance, detriment, loss or responsibility, suffered or undertaken by the other.'
• The value of consideration


  • Must be sufficient but need not be adequate
  • A peppercorn does not cease to be good consideration if the promisee does not like pepper and will throw away the corn
• Executed consideration


  One party has performed their consideration
• Executory consideration


  Neither party has performed their consideration
• Whether consideration is executed or executory


  Makes a difference regarding remedies/ways to end a contract
• General rule: Past consideration is not valid consideration
• Exception to past consideration

  • Lampleigh v Brathwait (1615)
• Conditions for past consideration to be valid

  1. Was the act done at the promisor's request?

  2. Was there an understanding that some type of payment would be made?

  3. Would the contract be otherwise enforceable if promised in advance?
• If yes to all questions, then the 'past consideration' will be valid
• A promise to merely carry out an existing legal duty is not valid consideration
• A promise to carry out an existing contractual obligation is not valid consideration
• Practical benefit


  If A has a contract to employ B for work, before it is done, A has reason to doubt whether B will, or be able to complete his side of the bargain. A promises B to pay more. A 'obtains in practice a benefit, or obviates a disbenefit' from giving the promise, and there is no economic duress or fraud.
• If consideration is owed to a third party this may be valid consideration for a new promise