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27 Cards in this Set
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Definition: Currie v Misa |
"a valuable consideration, may consist of some right, interest, benefit, or profit accruing to one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by another" |
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Consideration need not be adequate. Which case? |
Chappell v Nestle Co: "A contracting party can stipulate for what consideration he choose. Peppercorn does not cease to be consideration if the party does not like pepper and will throw away the corn" - Lord Somervell |
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Chappell v Nestle: Held? |
The wrappers did form part of the consideration as they constituted financial value to Nestle |
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Lipkin Gorman v Karpnale: Held? |
Gambling chips worthless and did not constitute consideration |
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Intangible Benefit Rule + Case |
Intangible benefit not usually good consideration. White v Bluett: Ceasing to complain was not good consideration and money could be recovered |
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Exceptions to this rule (2 cases) |
Hamer v Sidway (US): Consideration was provided due to the forbearance of legal rights to smoke, drink and play cards by the nephew Pitt v PHH: The agreement to pay in 2 weeks and not fight third party or seek injunction were good consideration |
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Past Consideration Rule + Case |
Eastwood v Kenyon: Consideration must be in response to the promise and move afterwards, not before. Promise from K to pay back was made after E's performance, so the performance was not good consideration |
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Extra consideration needed for further promise Rule + Case |
Rascorla v Thomas: Previous consideration is not sufficient for subsequent promise. No extra consideration provided for the oral promise, so no binding contract |
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Implied Assumpsit + Case |
Even if the promise has come after consideration is performed, the court may find that the promise was implied at the time of performance, so consideration not actually in the past Lampleigh v Braithwaite |
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Lampleigh v Braithwaite: Held? |
B's promise was implied at the time of L's consideration act, so the consideration was not in the past, and contract formed |
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Pao On v Lau Yui Long: Held? |
The initial promise to not sell shares for a year was lasting consideration from P for the new indemnity clause also. Held that this promise survived the "buy back clause" alteration that looked like a new promise |
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Pao On reasoning |
(i) Performance must be at the request of the promisor (ii) Clearly understood or implied between the parties at the time of the request that the promisee would be rewarded for doing the act (iii) The later promise must be one which would have been enforceable had it been made at the time of the act |
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Consideration must move from the promisee case |
Dunlop Pneumatic Tyre v Selfridge |
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Consideration does not always need to move to the promisee case |
Jones v Padavatton |
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Consideration must be requested by the promisor case |
Combe v Combe: Not claiming maintenance grant not valid consideration because it was not requested by the promisor (husband) |
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Performance of a pre-existing public law duty case + rule |
Collins v Godefroy. Performance of pre-existing public law duty (for example, appearing in court under subpoena) does not amount to valid consideration |
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Exception to this general rule |
Ward v Byham: Denning held looking after child was good consideration as the mother did more than required by law |
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Another exception |
Glasbrook Bros v Glamorgan: The police did more than public law duty required |
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Existing duty owed to third party rule + case |
Shadwell v Shadwell: Performance of existing duty owed to third party was good consideration |
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Existing duty owed to promisor rule + case |
Stilk v Myrick: Generally, performance of an existing duty to the promisor is not good consideration. Sailor did not do anything extra for the captain and therefore not entitled to extra pay |
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Exception |
Williams v Roffey Bros: Held to be valid consideration for the promise of extra pay due to practical benefit |
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What was the practical benefit? |
(i) Williams continued to work (ii) Roffey avoided spending time and money of finding someone else (iii) Roffey avoided penalty clause with main client (iv) Better payment schedule organised |
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Cases that have followed Williams |
Adam Opel Renault v Mitras SCT v Trafigura Atrill v Dresdner |
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Cases that did not follow Williams |
WRN v Atris |
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Forbearance of existing rights as consideration. Good or bad? |
Pinnel's case: General rule that a promise to accept part payment of a debt does not constitute good consideration for a promise to discharge entire debt |
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Foakes v Beer |
Part payment of a debt does not amount to good consideration. The promise by Mrs B to accept part payment of the debt did not amount to consideration for discharging the whole debt |
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In Re Selectmove |
Applied Foakes v Beer. Part payment of debt did not constitute good consideration for the Inland Revenue's agreement to forego the rest of the payment. But, surely an immediate payment constitutes an immediate practical benefit |
