Consideration cannot be in the past

Consideration can be either Executed, which means perform upon the contract
formation and Executory, which means promise to perform in the future. When the
activity is before the promise to pay, it is past consideration; past consideration is no
consideration.
如 果 可 以 ： They can still count on consideration if the past consideration full the
three criteria. The three criteria are the past act was done at the promisor's request, it
was understood between the promisor and the promisee that payment would be made
later, and the final criteria are the payment or benefit was legally enforceable when it
was promised in advance.
案例：Also, a case law is like this, called Re McArdle [1951]. The story is about A
and B, who were co‐owners of a house. A had previously made improvements to the
house. B promised to pay for the amount A had spent on the improvements. B later
refused to pay. The event, which is the action, had not been finished. Therefore, it was
only a promise to pay and not a gift. A had already performed the work before she
asked for payment. Her consideration was in the past. Past consideration is not
reasonable consideration. Therefore, the agreement was unenforceable.

Consideration must be sufficient but need not be adequate

“Sufficiency” means whether there is valuable consideration or not. “Adequacy”
means whether the consideration provided by one party has equal economic value to
the consideration provided by the other party. For the insufficient consideration, there
are 3 cases. They are performing existing contractual obligation, part payment of a
debt and performing public duty respectively.
案例：In Stilk v. Myrick (1809), there were 11 seamen in total at the beginning. Two
sailors deserted the ship and the captain agreed to split their wages among the
remaining 9 sailors, equally. The captain later refused to pay the additional wages. P,
one of the seamen on the ship, filed an action to recover the additional wage, but he
failed. They had undertaken to do all they could under all the emergencies of the
voyage before they sailed from London. They had provided no fresh consideration for
the additional wages. The court therefore finally held that the men were not entitled to
the money. According to this case, if someone is just performing his/her existing
obligation instead of fresh consideration, then the consideration is insufficient.
In Hartley v Ponsonby, there were seventeen of the thirty‐six seamen deserted, and
only six of the remaining men were competent seamen. As many crew members
missing, it was unsafe for the remaining crew to continue the voyage, but they agreed
to work after being promised extra pay. When the ship arrived at the home port, D
refused to pay the crewmen the extra money he had promised. The court finally held
that the desertion of so many crewmen (compared to the desertion of two crewmen in
Stilk v Myrick) had made the voyage dangerous. The seamen did not originally agree
to work on a dangerous ship. They agreed to work after the being promised extra pay.
They needed to perform not only the existing contractual obligation after the many
crew members missing. According to this case, if the duty is exceeded and can be
showed that it is out of the original obligation, it can be classified as fresh
consideration.
如 果 可 以 ： In Williams v Roffey Bros (1991), Roffey Bros was a contractor to
refurbish some flats. They subcontracted the carpentry work to Williams for £20,000.
Williams realized later he had priced too low. He refused to continue with the work.
Roffey Bros would be subject to a penalty for late completion under the main
contract. They promised extra payment to Williams for him to finish the work on
time. The court held that Williams could entitle the extra payment since he has
provided a factual benefit (helping Roffey Bros to avoid penalty) and a factual benefit
was fresh consideration. If someone provides factual benefit to the other parties even
though he/she may be just doing something within his/her existing and original
obligations.

Consideration must be real or genuine

The promise must be valuable. The consideration must be valuable in the eyes of law
such as right, benefit and economic value.
案例：无权：White v Bluett (1853)
Bluett Sr. lent his son, the respondent in this case, a sum of money and died before his
son had repaid this to him. Bluett Sr. and Jr. had agreed on this and completed a
promissory note to this effect. Bluett’s will was executed by White. In the course of
executing the will, White sued Bluett’s son for the outstanding payment. The son
argued, as a defence, that Bluett Sr. had stated that repayment was not necessary to
render the promissory note ineffective if the son stopped complaining about the
manner in which Bluett Sr. spread his estate among the other members of the family.
The court held that the son had no right to complain, which means not complaining
was not a valuable promise. An invaluable promise cannot give an enforceable
consideration. There is no contract but only an agreement between the father and his
son.
放弃权利换利益：In Dunton v Dunton (1892), the parties entered into an agreement
pursuant to which Mr. Dunton agreed to pay his former wife an allowance if she
behaved ‘with sobriety, and in a respectable, orderly, and virtuous manner’ and did not
commit an act whereby she or Mr. Dunton could be subjected to ‘hate, contempt, or
ridicule’ as his ex-wife spoke ill of her ex-husband everywhere. On the issue of
whether the promise to behave in this way constituted valid consideration, the
majority held that it did - Mrs. Dunton promised not to do something which she was
lawfully entitled to do. The former wife promised to surrender her freedom to behave
badly is a good consideration. According to this case, Mrs. Dunton gave up her right
to behave badly which is legally that can be a good consideration she provided to Mr.
Dunton.

Consideration must move from the promise

A 3rd party who does not provide consideration in the contract cannot enforce the
contract.
案例：Tweddle v Atkinson [1861]
John Tweddle and William Guy mutually agreed in writing to pay sums of money
(£100 and £200, respectively) to Tweddle's son William (who was engaged to Miss
Guy). Guy then died before payment, and when the estate would not pay, William
Tweddle then sued Mr Atkinson, the executor of Guy's estate, for the promised £200.
The court ruled that a promisee cannot bring an action unless the consideration of the
promisee moved to him. Consideration must move from party entitled to sue upon the
contract. No legal entitlement is conferred on third parties to an agreement. Third
parties to a contract do not derive any rights from that agreement nor are they subject
to any burdens imposed by it.

Consideration must be legal

Consideration is not required for a contract under seal

Intention ： social and domestic agreements ， 考 虑 有 无 consideration ， Only the

specialty contract has legal effect when there is no exchange of consideration.

无法律效应： For Intention, it stated that the contract will only be binding if both
parties intend to be bound legally. There are two types of agreements: Social and
domestic agreements and Commercial agreements. There is a presumption that
agreements between family members and friends are presumed not to have any legal
effect unless there is sufficient evidence that can prove both parties have an intention
to be bound legally.

有法律效应： For Intention, it stated that the contract will only be binding if both
parties intend to be bound legally. The social and domestic agreement presumes that
the contract made between friends or relatives has no legal effect (Balfour v. Balfour
[1919]). However, this presumption of social and domestic agreement can be rebutted
when the parties show his/her intention clearly to be bound so that the contract made
between friends or relatives has a legal effect.
案例：
We can refer to the case Balfour v Balfour [1919] (Arjunan & Baksh, 2009). In that
case, the Balfours took a leave of absence to visit England, and when the husband
returned to Ceylon, his wife was ill and unable to accompany him. Balfour pledged to
give her a monthly remittance until she could support herself without asking for more.
As she remained in England forever, Balfour stopped paying her. Mrs. Balfour filed a
lawsuit and asserted that a contract existed.

If a promise is made between family or friends, it is presumed to be social and

domestic agreements, which have not any legal effect unless they have done
something to indicate their intention to create legal relations. In that case, the court
held that there was no intention to create legal relations. Their agreement was not a
contract, just a domestic agreement (Arjunan & Baksh, 2009).
Capacity
Capacity means that certain groups of people may not be legally bound by their
promise such as Minors (under 18) or People with mental disabilities. But Minors will
be bound by serval contracts. The first one is contract for necessaries. “Necessaries”
means goods suitable for the minor’s condition in life. A minor is required to pay a
reasonable price where necessaries are sold and delivered to him/her. The second is
that contracts of service, apprenticeship, and other beneficial contracts such as
education, training etc. The Persons with Mental Disabilities - Mental disabilities may
arise from disease, drugs or alcohol or otherwise, so long as the person can prove that
at the time the contract is made, he was incapable of understanding what he was
doing; and the other party knew of his condition.