CONSIDERATION

DATED:
AUGUST 30, 2022

PREPARED BY:
MUHAMMAD SHAAF
 
 A CONTRACT

OFFER

OFFEROR OFFEREE

ACCEPTANC
E

CONSIDERATION
 BACKGROUD: WHAT IS CONSIDERATION ?

• The legal definition of consideration is based on the concept of

a “bargained-for exchange”, the price for which the promise
of the other is bought .This means that both parties are
getting something that they've agreed to, usually something of
value for something of value.
• Consideration must flow from both sides of the contract, it can
be a promise to do something, a promise not to do something, a
benefit for the promise, a benefit for a third person at the
promise’s direction and anything of real value to promise.
 EXCEPTIONS TO PAST CONSIDERATION RULE

• If the service was rendered at the request of the Promsior on

the understanding that a payment would be made then a
subsequent promise to pay a certain sum will be enforced on
the basis that it merely identified the amount.

LAMPELIGH V RE CASEY’S PATENTS

BRAITHWAITE (1615) (1892)
 TYPES OF CONSIDERATION

EXECUTED PAST
EXECUTORY
An act wholly performed at Something already
A promise to do the time the contract is completed before the
something in future, an
made. An example of this promise is made,
example of it are mutual
type can be found in the however this is not a
promises between
case of Carlill v Carbolic valid consideration in
parties.
the eyes of law.
Smoke Ball Company.
 CONSIDERATION MUST BE SUFFICIENT
NOT ADEQUATE

GENARAL IT MUST BE REAL AND NOT ILLUSORY

RULES CONSIDERATION

CONSIDERATION DELIVERED TO A THIRD

PARTY ARE GOOD CONSIDERATION
CONSIDERATION IN PAKISTAN LAW – RELEVANT
STATUTE

THE CONTRACTS ACT 1872

SECTION 23 SECTION 2(D) SECTION 25

CONSIDERATION FOR PART PAYMENT OF DEBT

PINNELS’S CASE 1602

Payment of a smaller sum will not discharge the duty to pay a
higher sum, an example of this is if a creditor is owed 300 rupees
and agrees to accept 290 rupees in full settlement, he can later
insist on the remaining 10 rupees because there is no new
consideration from the debtor for his promise to waive the 10
rupees.
 PROMISSORY ESTOPPEL

• A defense available for the debtor to prevent creditor from

claiming the remaining of the debt where part payment as been
accepted.
ONLY USED BY DEBTOR TO SEEK PROTECTION

CENTRAL LONDON
HUGHES V
PROPERTY TRUST V
METROPOLITAN
HIGH TREES HOUSE
RAILWAY CO. (1877)
(1947)
 CONCLUSION

• It is imperative to note that Consideration is an essential

concept in formation of contracts,we can analyze that the law
regarding consideration is broad and narrow at the same time
as the rules and exceptions are very clear but there are a few
aspects like promissory estoppel which are more
understandable when provided with interpretation and examples
as mentioned above.