Consideration 2

Consideration must “move from the promisee”

Suppose A promised B (promise) “If you give C $500 I will do the same”. B gives C the
money but A does not. Can C sue?
A has not paid C (the intended beneficiary) but, traditionally, C cannot sue. Why not?
1. Because C has not provided consideration (the “from the promisee” rule); and
2. C is not a “party to” the contract between A and B.
Tweddle v Atkinson (1861)
The daughter of a man called Guy was about to marry P (Tweddle). Guy made a
contract with P’s father that each would pay money to P. The father did but Guy did
not. P sued Guy’s executors (Guy was now dead).
P’s action failed because P was “a stranger to the consideration” (Wightman J). That
is consideration had not moved from the promisee. BUT, of course, it could also have
been decided on the basis that P was not a“Party” to the contract (Privity).
Dunlop v Selfridge (1915)
Dunlop’s sold tyres to Dew & Co under a contract in which Dew promised not to re-
sell the tyres UNDER a fixed price AND to get the same promise from any purchaser.*
Selfridge made the promise (to Dew) BUT then re-sold more cheaply. Dunlop sued
but failed because they were not a party to the contract between dew and Selfridge.
But now, an agreement by A and B INTENDED to benefit C can be enforced
PERSONALLY by C provided s/he has been clearly identified by A and B and their
intention to benefit C is clearly expressed.
Cap 623 Contracts (Rights of Third Parties) Ordinance.. .
s. 4 (1) states that a “Third Party” may enforce the terms of a contract where the
contract “expressly” states this will be so and either “names” or sufficiently
“identifies” the third party.

“Invented” Consideration
De La Bere v Pearson (1908)