CONSIDERATION

 Consideration is known as ‘badge of enforceability’

 Executory consideration: which is to take place in future e.g if one makes to deliver
something next week so he will we paid for it
 Executed consideration: which takes place immediately e.g daily life shopping

 TRADITIONAL DEFINITION OF CONSIDERATION THROUGH CASE OF CURRIE V

MISA (1875): (Lush J)
a valuable consideration, in the sense of the law, may consist either in some right, interest, profit
or benefit accruing to the one party, or some forbearance, detriment, loss of responsibility given,
suffered or undertaken by the other.

 Definition of consideration by Lord Dunedin :

“an act or forbearance of one party or the promise there of is the price for which the
promise of the other is bought and the promise thus given for value is enforceable”.

Gilmore (author): “consideration is to contract law as elvis is to rock & rule”

 Benefit to the one who make the promise i.e promisor

 Loss/detriment to the one to whom the promise is made i.e promisee
 Wholly executory: it is made by exchange of promise but neither party has yet performed

Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd (1915)

Tweddle v Altkinson

- Rules of consideration:

1. Consideration must move from a promisee/ can also move to a third party

Tweddle v Altkinson

Can move from a third party

Bolton v Madden

2. Consideration must be sufficient not adequate

The value of money is never seen what is seen is the promise made and its valid consideration
matters
Thomas v Thomas
Chappell v Nestle
White v Bluettt (UK Case)
Hamer v Sidway: (US Case )
Ward v Byham
Edmonds v Lawson (2000)

3. Past consideration is not a good consideration

Generally the consideration must be given after the promise for which it is given to make it
enforceable.
A promise which is given only when the alleged consideration has been completed is
unenforceable
Eastwood v Kenyon
Roscorla v Thomas
Re McArdle

 Exceptions to past consideration

Pas On v Lau Yiu Lang

a. The act constituting the consideration must have been done at the promisor’s request/
Where the act has done at the request of the promise (implied assumpt)

Lampleigh v Braithwaite (1650)

b. The parties must have understood that the work was to be paid for in some way, either
by money or some other benefit. / Where there is an understanding between parties the
service will be paid for in some way

Re Casey’s Patent

c. The promise would be legally enforceable had it been made prior to the acts constituting
the consideration.
Objective approach will be applied to find the result for the above given scenarios
4. Present obligation is a good consideration

1. Obligation which lie under the law, independent of contract (legal duty)
This means where one is bound to perform his legal duty under the law and if that person goes
beyond his duty for public then he is enforced to reward or consideration i.e fire fighters / police
officers
Glasbrook v Glamorgan
Leeds v Chief Constable of west Yorkshire
Collins v Godefray
Harris v Sheffield
Reading Festival Ltd v West Yorkshire Police Authority
Ward v Byham

2. Obligation owed under a contract by a third party

Pas On v Lau Yiu Lang (Lord Scarmon)

Exception case
Shadwell v Shadwell
Scotson v Pegg
The Eurymedon case: (ship case)

3. Existing contractual duty/ Obligation to perform existing obligation under a contract to

the same contracting party
Stilk v Myrick (v.v.v.imp)
Harris v Watson (1791)

Exception cases
Hartley v Ponsonby
Williams v Roffey Bros (v.v. imp case) -> 5 imp points from subject guide

 As per Glidwell LJ, the ‘practical benefit’ approach will apply in 6 points:
The application of Williams v Roffey was held to apply when:
1. There was a contract for the supply of goods or services.
2. A was unable to perform as promised (which can include economic reasons).
3. B agreed to pay more.
4. B obtained a practical benefit from that promise (as outlined above).
5. There was no fraud or duress by A to obtain that promise.
6. If the above are satisfied then consideration is found.

 Economic duress
 Vitiating factor: not allow to complete contract/ the economic contract can set aside due to
economic duress
 Acceptable commercial pressure: which do not amount to economic duress
 Unacceptable commercial pressure: which amount to economic duress

4 elements to satisfy/ prove duress in Pao On case:

- a threat was made
- the threat was illegitimate
- coercion of will initiates consent

5. Part payment of debt is not a good consideration

Pinnel’s Case: (1602) - exception case

Foakes v Beer (v.v.imp)
Re Selectmove (1995)
Collier v Wright
MWB v Rock Advertising (2018)

- Promissory Estoppel:
The doctrine of promissory estoppel is concerned with the modification of existing contracts.
The position under the classical common law of contract was that such modification would only be
binding if consideration was supplied and a new contract formed.
The giving up of rights under the first agreement by both sides would have sufficient mutuality
about it to satisfy the doctrine of consideration.

Hughes v Metropolitan Railway

CLP (central london properties) v High trees

Promissory Estoppel (v.imp) - exceptions

1. Composition Agreements
 A. B. C
Creditor <- Debtor
Agreed to accept a lesser sum
Woods v Roberts

2) Payment of a smaller sum by a third party

A -> B
Creditor Debtor
|
C (father) paid small sum of money
Common law: judge made law
Equity: law made on fairness

- Limitations/ requirements of Promissory Estoppel:

1. Clear and unequivocal promise
The promise by one party to a contract that he will not insist on his strict legal rights under a
contract must be clear and unequivocal, but may nonetheless be express (as in the landlord’s
promise in High Trees to accept half rent) or may arise from conduct as occurred in Hughes v
Metropolitan Railway (1877).
Kim v Chasewood Park Residents

2. Shield not a sword

This is related to the first point (concerning the need for an existing relationship).
Combe v Combe
Baird Textile Holdings Ltd v Marks & Spencer Plc
Waltons Stores (Interstate) Ltd v Maher (1988)

3. Reliance (believe something)

At the heart of the concept of promissory estoppel is the fact that the promisee has relied on the
promise.
It is now accepted that reliance is sufficient when it is in circumstances where it would be
inequitable to allow the promisor to go back on his word
W J Alan & Co v El Nasr (1972)
The Post Chaser (1982))
4. It must be inequitable for the promisor to go back on the promise
The doctrine of promissory estoppel has its origins in equitable ‘waiver’. It is thus regarded as an
equitable doctrine. The importance of this is that a judge is not obliged to apply the principle
automatically, as soon as it is proved that there was a promise modifying an existing contract
which has been relied on. There is a residual discretion whereby the judge can decide whether it is
fair to allow the promise to be enforced.

D & C Builders v Rees (1966)

5. Doctrine is suspensory, does not extinguish rights

Whereas a contract modification which is supported by consideration will generally be of
permanent effect, lasting for the duration of the contract, the same is not true of promissory
estoppel. Sometimes the promise itself will be time limited. Thus in High Trees House it was
accepted that the promise to take the reduced rent was only to be applicable while the Second
World War continued. Once it came to an end, the original terms of the contract revived.
Tool Metal Manufacturing Co Ltd v Tungsten Electric Co Ltd (1955)