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Consideration: (I) Tangible Returns
Consideration: (I) Tangible Returns
LAW OF CONTRACT
2. Consideration
1. Definition
(i) Classical definition
Currie v Misa (1875) L.R. 10 Ex 153
(ii) Modern approach
*Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991] 1 QB 1
Edmunds v Lawson [2000] 2 WLR 1091
2. When must consideration be furnished?
a. The relevant time
Eastwood v Kenyon (1840) 11 A & E 438
Roscorla v Thomas (1842) 3 QB 234
b. Past consideration is no consideration
Re McArdle [1951] Ch 669
Lampleigh v Braithwait (1615) Hob 105; 80 ER 255.
Re Caseys Patents [1892] 1 Ch 104
*Pao On v Lau Yiu Long [1980] AC 614
3. Who must give consideration?
Consideration moves from the promisee
Tweddle v Atkinson (1861) 1 B & S 393
Edmunds v Lawson (as above)
4. What constitutes the requisite value?
Treitel v Atiyah
The truth is that the courts have never set out to create a doctrine of consideration. They
have been concerned with much more practical problems of deciding in the course of
litigation whether a particular promise should be enforcedWhen the courts found a
sufficient reason for enforcing a promise they enforced it; and when they found that for one
reason and another it was undesirable to enforce a promise, they did not enforce it. It seems
highly probable that when the courts first use the word consideration they meant no more
than that there was a reason for the enforcement of the promise. Atiyah: Consideration: A
Restatement in Atiyah: Essays on Contract Clarendon Press 1986, 179, 181-2.
a. Consideration should be sufficient not adequate
(i) Tangible returns
Thomas v Thomas [1842] 2 QB 851
Chappell & Co Ltd v Nestle Co. Ltd. [1960] AC 87
A contracting party can stipulate for what consideration he chooses. A peppercorn does not
cease to be good consideration if it is established that the promisee does not like pepper and
will throw the corn away. Per Lord Somervell 114.
Lipkin Gorman v Karpnale Ltd [1992] 2 AC 548
De La Bere v Pearson Ltd [1908 1 KB 280
Further Reading:
Luther: Campbell, Espinasse and the Sailors: Text and Context in the Common Law
(1999)19 Legal Studies 526
Fuller: Consideration and Form (1941) 31 Col LR 799
Raz: Promises in Morality and Law (1982) 95 Harvard Law Review 916
Stephen A. Smith: Contract Theory (2004) Clarendon Press 209-233
OSullivan: In Defence of Foakes v Beer [1996] Cambridge Law Journal 219.
Atiyah: Consideration: A Restatement reproduced in Atiyah: Essays on Contract
(Clarendon Press 1986), 179.
Treitel: Consideration: A Critical Analysis of Professor Atiyahs Fundamental Restatement
(1974) 50 Australian Law Journal 439.
3. Promissory Estoppel
Reading:
A.T. Denning, Recent Developments in the Doctrine of Consideration (1952) 15 Modern
Law Review 1
Stephen A. Smith: Contract Theory (2004) Clarendon Press 233-244.
Further Reading:
M. Freeman, Contracting in the Haven: Balfour v Balfour Revisited in R. Halson, Exploring
the Boundaries of Contract (1996), 68
Stephen A. Smith: Contract Theory (2004), 212-215
Hepple: Intention to Create Legal Relations [1970] CLJ 122
Simpson: Innovations of Nineteenth Century Contract Law (1975) 91 LQR 247, 263-5.
Dr Fiona Smith
October 2009
LLM Intermediate 2009/10