BUSINESS LAW

Assignment#2

Hamza Ihsan Sp17-BBA-007

Sabir Shah Sp17-BBA-011
Asaad Ullah Sp17-BBA-014
Syed Essa Rizvi Sp17-BBA-019
Abdullah Noor FA16-BBA-010
 Consideration Cases

Alliance Bank v Broom (1864) 2 Dr & Sm 289

Facts
The defendant owed an unsecured debt to the plaintiffs. When the plaintiffs asked for some
security, the defendant promised to provide some goods but never produced them. When the
plaintiffs tried to enforce the agreement for the security, the defendant argued that the
plaintiffs had not provided any consideration.
Held
It was held that normally in such a case, the bank would promise not to enforce the debt, but
this was not done here. By not suing, however, the bank had shown forbearance and this was
valid consideration, so the agreement to provide security was binding.
Collins v Godefroy [1831] 109 ER 1040
Facts
Plaintiff sued to recover compensation for loss of time in attending court as a witness under
subpoena.
Held
That since the law imposes a duty on people to turn up, a promise of remuneration to do that
which the court requires is without consideration. The principle also applies to promises not
to do that which the law prohibits.
Glasbrook Bros Ltd v Glamorgan County Council [1925] AC 270 House of Lords
Facts
During the 1921 coal strike, miners were involved in picketing which sometimes led to
violence. The colliery manager insisted on extra police cover and some 70 people were
provided. Under a written agreement, Defendant promised to pay specified amounts. When
payment was sought, Defendant refused to pay.
Held
That any attempt by a public authority to extract payment for normal services should be
strongly resisted. If in any situation the provision of police is deemed necessary, then it
would not be proper to exact payment for those services.
However, where the person or institution under a duty has, in return for a promise of
payment, gone further than that duty requires, the additional performance can constitute
consideration. Where there is no public policy bar to the performance of the duty being a
matter of contract, then another person can acquire a right to enforce the duty by a promise to
pay for its performance. If the provision of extra police was in excess of operational
requirements, (as was the case here) then it could be proper to ask for payment for it.
Stilk v Myrick (1809) King's Bench
Facts
Plaintiff was employed as a seaman under articles at £5 per month. On a voyage from
London to the Baltic and back, 2 of the crew deserted. The captain could not replace them
and the rest of the crew said that they would work the vessel back to London, and share the
wages of the other 2. The extra money was not paid. It was said that before they left on the
voyage, they had undertaken to do all they could under all the emergencies of the voyage and
the desertion of the crew is to be taken as part of such an emergency.
Held
The court found that the remaining crew had no liberty to quit when the other men left.

Hartley v Ponsonby (1857)

When nineteen out of thirty-six crew of a ship deserted, the captain promised to pay the
remaining crew extra money to sail back, but later refused to pay saying that they were only
doing their normal jobs. In this case, however, the ship was so seriously undermanned that
the rest of the journey had become extremely hazardous .It was held that sailing the ship back
in such dangerous conditions was over and above their normal duties. It discharged the
sailors from their existing contract and left them free to enter into a new contract for the rest
of the voyage. They were therefore entitled to the money.