Consideration

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Past Consideration

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Roscorla v Thomas/Re McArdle - A promise that is made after the act is completed is not enforceable. There was no benefit given in return for a promise, and their detriment had not been promised to compensate.

Teo Tipene v Mere Te Puni - If B subsequently promises to pay, it is not enforceable. The questions whether there is 'any understanding the world would be paid for'.

Lampeigh v Braithwait - A subsequent promise is binding where the act was done at the promisor's request (Hunt v Bate). A nexus can be shown it is part of the same business, not family, transaction. Adopted in Casey's Patents. The benefit must be legally enforceable (Lord Scarman).

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Consideration must move from the promisee

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Contracts and Commercial law Reform Committee - This held that consideration of another party shall sufficiently constitute lawful rights to a third party. Eg: A promises payment to B if C performs for A. B can sue A for C.

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Joint Promisees and Consideration

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Coulls v Bagot's Executor and Trustee Co Ltd - Barwick J held that is B and A were joint promisees (husband/wife per se), then either could sue provided one of them had consideration. Reinforced in McEvoy v Belfast Banking Co Ltd where a father opened an account for his son, despite son giving no consideration.

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Sufficiency of Consideration

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The courts will not inquire into the sufficiency of consideration. Ames, Lectures on Legal History holds that "any act can merit consideration" - subject to morality, policy, and context.

Thomas v Thomas - $1 was to be paid per year for a house. Re Murphy reinforced in holding consideration was just evidence of serious intent to be bound (Vantage Navigation Corp and Blaire v Horne "no longer of dominating importance"). However, if improperly taken advantage of, it is unconscionable - does not need to be FAIR but does need to be WILLFUL.

Cons. should simply be 'something of value in the eyes of the law'.

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Forbearance as Consideration

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Hamer v Sidway - Consideration may well be forbearance to do something (not drink/smoke etc) as a unilateral contract. A common example is asking for more time to pay debt (Paulger v Butland Industries). Upheld in AG for England and Wales v R, in confidentiality as forbearance.

Miles v NZ Alford Estate Co - Forbearance of a doubtful claim is consideration, but not a surely-failed one. Common law holds is a surrender of a CLAIM to a legal right, not the legal right itself (Jeremy Finn).

Couch v Branch Investments - They must prove they had an HONEST BELIEF for success (reinforced in Callisher and Horton).

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Inducements to buy

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Chappell & Co Ltd v Nestle - Consideration does not need to be money, such as here being 'wrappers' as well as money for a song. Contracts should be consideration with all consideration in mind.

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Gratuitous Acts with Improper Performance

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De La Bere v Pearson - A performed an act for the world (financial advice), on which B suffered loss. Consideration was publicity, B paid for the paper.

Hedley v Byrne & Co Ltd - The judges held that there would an ACTION IN NEGLIGENCE where an act is presumed good, but is improper.

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Insufficiency of Consideration

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Despite the rule, Jeremy Finn holds cons. is insufficient where one is already doing what one is bound to do. Eg Collins v Godefroy - obeying the law (duty as a citizen).

Glasbrook Brothers v Glamorgan County Council - If, however, they go BEYOND what is necessary, then it is consideration (mine riots).

Stilk v Myrick - No cons. where already doing what's required by prev. contract with same party (sailors scen.), unless prev. contract is nudum pactum. Williams v Roffey - exception is where raising a price is resolving GENUINE DIFFICULTIES in performance (bona fide). Not necessary to demonstrate detriment to promisee (Tipping J confirmed in Her Majesty's AG for England and Wales v R).

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Partial Payment of Debt

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Foakes v Beer - Rule: Part payment of debt does not extinguish the whole debt (s92 Jud. Act receipt may satisfy the debt). However, PEPPERCORNS with creditor's consent will be adequate (Collier). Dalgety - This case held that banking or receipt was only one factor. It should be considered who accepted the payment, the degree of acceptance and conduct of the parties.

Vanbergen v St Edmund's Properties - A peppercorn may constitute EARLY payment or different PLACE as consideration, as are detriment to payer.

Homeguard Products v Kiwi Packaging - Exception: where debt is disputed, acceptance (banking) of lesser amount is binding - disputed.

Wood v Roberts - Creditors can mutually forgo parts of debt for a poor debtor (embracing "practical realities rather than legal niceties" says Tipping J). Debtor is a third party beneficiary under s4 CPA.

section 4 CPA - C promises $50 to discharge A's debt to B, A is a benefit under CPA. Welby v Drake holds suing would be fraud.

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Third Parties and Consideration

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Shadwell v Shadwell - Performing a PRE-EXISTING DUTY to a third party was consideration for payment promised after the promise was made to the third party. Eg: A had a pre-existing duty to B, and C promised payment for it prior to performance.

Pao On v Lau Yin Long - A's promise to perform an existing contractual obligation for C, who is not party to contract between A and B, can be valid consideration. Key difference: they are not the same party.

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Promissory Estoppel and Consideration

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High Trees - A promised gratuitously to reduce rent during a war, and raise it after. Raised question whether a promisor could go back on gratuitous promise and demand arrears.

Walton Stores Ltd v Maher - Party commenced work on building led to believe contract would be signed - they became entitled to relief for unconscionable position. Courts will find a remedy to avoid detriment causes by another party on an understanding they shared. Restated in Dickson Elliott Lonergan v Plumbing. They are estopped from denying responsibility.

Harris v Harris - Need be no existing contract (Krukziener), and may be a cause of action, not just a defense (McDonald v AG - where farmers were led to believe a falsehood).

Taylor's Fashions v Liverpool Vict. - Propriety estoppel is where A led B into belief, which they relied upon to point of substantial loss - entitled to damages. Amalgamated Investments and Prop Co - Lord Denning summarised:

"...parties to a transaction proceed... on an underlying assumption... neither of them allowed to go back on that assumption when it would be unjust for them to do so."

Gillies v Keogh - Richardson J pointed to 1) encouragement of belief, 2) reliance, 3) detriment resulting, 4) unconscionable to go back on their word (P v P).

Hughes v Metro. Railway - in a gratuitous promise amounting to waiver, a party cannot enforce without regard to these dealings.

Emmanuel Ayodeji - Lord Hodson held to 1) it has altered their position. 2) Promisor can abandon promise on giving REASONABLE OPPORTUNITY for promisee to resume position. 3) Promise only becomes irrevocable if impossible. Commissioner of Inland Revenue v Morris held that "altered" must be EXPLICIT EVIDENCE in the eyes of law, socially, economically, legally in order to qualify and Amagamated.