Re McArdle (1951)

This case (Re mc cardle [1951] Ch 669) is the archetypal example of a past benefit
being unacceptable as Consideration in a Contract. The occupants of a house
carried out certain improvements during their tenancy, and were offered payment
in recompense by the owner. However, the owner died before doing so, and his
representatives refused to honour the promise. The courts supported the owner's
representatives, because the tenants had not provided good consideration.

Note that in this case the tenants' work was carried out at their own behest, and not
at the request of the owner. Had the owner explicitly requested the tenants to do
the work, and then offered payment, the court may have been able to use the
doctrine of Implicit assumpsit to incorporate the past work into the agreement, and
thereby deem it consideration.

Re McArdle (1951)
This case is an example of past consideration for a promise or bargain and as such
cannot be accepted as good consideration.

The basis for this is that any promise made by a party to provide a benefit for the
action of another party when that action was performed previous to and outside the
promise, cannot be considered to have formed the necessary detriment essential to
good consideration.

In this particular case, the claimant had carried out improvements to a house
voluntarily. Two years later the claimant received a promise to be reimbursed for the
costs but for the reasons stated above it was considered a gratutious promise and
therefore unenforceable as a contract or bargain.

It is important to distinguish this from a detriment incurred by a party in return for the
promise of a benefit to be received later. Since the promise was made before the
detriment was incurred it is considered an enforceable promise and good
consideration since the agreement had already been struck before the detriment
was incurred for the receipt of some later benefit.

http://www.oddflower.org/gdl/index.php/Consideration