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Consideration - SUM

Contract law (University of London)

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Definition Dunlop “An act or forbearance of one party, or the

of Pneumati promise thereof, is the price for which the promise
consideratio c Tyre of the other is bought, and the promise thus given
n for value is enforceable.”
Chappell A contracting party can stipulate for what
v Nestle consideration she chooses. Thus, very trivial acts
1. may constitute consideration.
Considerati White v Merely natural affection cannot constitute a
on Bluett sufficient consideration. Consideration must have
must be some “economic” value.
sufficient Hamer v (refraining from drinking liquor): By restricting
but need not Sidway his own lawful freedom of action promisee may
be adequate give sufficient consideration
Pitt v Forbearance to sue may constitute a sufficient
PHH consideration, even though in a later period, when
Asset the question of enforcing of the contract is come,
Manage it is identified as a case of no prospect.
ment
Executed When one of the parties has done all that he is
2. considera required to do under the contract, ie, he has
Considerati tion ‘executed’ his side of the bargain and the other
on may be party’s consideration remains executory
executed/ex Executor When all the promises of the contracting parties
ecutory but y are going to be executed in the future that might
not past considera be termed as an example of executory
tion consideration.
Re Where a party makes a promise subsequent to
McArdle some actions carried out by the other party, that
(1951 promise may constitute a past consideration.
CA)
Lampleig Where the act of the promisee was performed at
Implied h v the request of the promisor and, subsequent to the
assumpsit Brathwai performance of the act by the promisee, the
t promisor promises to pay for it, then such a

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promise may be enforceable.

Three 1. promisee must have performed the original act
conditions Pao On v at the request of the promisor.
of implied Lau Yiu 2. It must have been clearly understood or implied
assumpsit Long between the parties when the act was originally
requested that the promisee would be rewarded for
doing the act.
3. The contents of the promise must have been
legally enforceable had it been promised in
advanced
3.
Considerati Bolton v The promisee can provide consideration by
on must Madden conferring a benefit on a third party at the request
move from (1873) of the promisor.
the
promisee
but need not
move to the
promisor
Collins v Performance of (or a promise to perform) a duty
Godefroy imposed by law is not a good consideration for a
a duty promise (of the promisor).
imposed by Glasbroo If the police officials (or arguably other public
law k Bros officials) do more than their stipulated job, on the
1925 HL request of the promisor, their performance may be
treated as a good consideration.
Ward v If any mother does something more than her
Byham stipulated duty, imposed by law (eg a statutory
(CA provision) that would be a good consideration.
1956)
Stilk v Performance of a contractual duty owed to the
Myrick promisor is not sufficient consideration
Where the new situations render the employees to
Hartley v refuse to carry out the contract and the employer

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Contractual Ponsonb promises some extra payment, the employees may

duty owed y (1857) be entitled to enforce the employer’s promise.
to promisor Williams In the absence of allegation of duress or fraud, if
v Roffey the performance of an existing contractual duty
Bros. confers a practical benefit on the other party
(CA (promisor), this can constitute a valid
1991) consideration. Adam Opel
Compag Where the intention of the contracting parties is to
nie v rescind the first contract and replace it with a
Abacha second contract, the rule in Stilk v Myrick has no
(No.4) application. On the other hand, the rule does apply
[2003] where the intention of the parties is that the
EWCA original contract should not be rescinded but
rather should be varied.
Obligations Shadwell Performance of, or promise to perform, an
owed with v existing obligation owed under a contract with a
TP Shadwell third party, can provide good consideration for
(1860) fresh promise.
Pinnel’s The general rule is that the payment of a lesser
case / sum in satisfaction for the greater cannot be any
Part Foakes v satisfaction for the whole, because by no
payment of Beer (HL possibility a lesser sum can be a satisfaction to the
debt 1884) creditor for a greater sum.
Re The principle of ‘practical’ benefit that may
Selectmo amount to consideration, recognised in Williams v
ve (1995 Roffey Bros. could not be extended to any
CA) circumstances governed by the principles of
Foakes v Beer (1884 HL) due to DP.
MWB An anti-oral variation clause in a written
[2016] agreement did not preclude any variation of the
EWCA agreement. An oral variation to re-schedule
Civ licence payments was supported by consideration
553. in that the licensor would recover arrears and its
See property would not be left empty.

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also
UKSC.
A. Pinnel’s The creditor will only be bound by such a promise
Exception case if the debtor has given consideration in return of
as laid in (1602) gift (eg gift of a horse, hawk, robe etc). D & C
Pinnel’s Builders
case
Pinnel’s If part payment was made at the request of the
case creditor at an earlier date or other place than is
(1602) contractually required, that might provide
additional consideration to discharge the whole
debt.
On the concession promise of a landlord, if a
B. Doctrine High tenant did not pay the full rent during a particular
of Trees period and afterwards the landlord tries to recover
promissory (1947) the part of the rent, which had not been paid
estoppel during the (possibly emergency) period, that claim
would be failed. The promisor would be estopped
by the court.
C. Welby v If accepted by the creditor in full settlement, part
Repayment Drake; payment of the debt by the third party affords a
by the Third Hirachan defence in an action to recover the balance
Party d
D. Wood v If a group of creditors of a debtor make an
Compositio Robarts arrangement with him (the debtor) whereby each
ns with agrees to accept a stated percentage of his debt in
creditors full satisfaction

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