Consideration CASE LIST for exams 2021 PDF

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Consideration Definition:  Thomas v Thomas [1842] – “some detriment to the plaintiff or some benefit to the defendant”   Currie v Misa [1875] – “some right, interest profit of benefit accruing from one party or some forbearance, detriment or loss or responsibility given, suffered or undertaken by the other”  Dunlop v Selfridge [1915] – “an act of forbearance, or the promise thereof is the price for which the promise of the other is bought and the promise thus given for the value is enforceable”.   Executory consideration – promise to carry out acts later, however no obligation to Offeror in unilateral contracts.

Rule: need not be adequate but must be sufficient  Thomas v Thomas [1842]: Man died, expressing that his wife be allowed to remain in house. Executors carried this out, charging £1 per year. Dispossession failed – moral obligation not relevant but paying ground rent was good consideration.  White v Bluett [1853]: Son owed money. Claimed agreement that debt would be forgotten if he did not complain about distribution of assets. This was not tangible, nor sufficient.  Ward v Byham [1956]: Father promised money towards upkeep if child “well looked after and happy”. Mother bound to look after, but no legal provision for happiness. Keeping child happy was good consideration. (Contradictory to White v Bluette).  Chappel v Nestle [1960]: Nestle offered record cheaply + 3 wrappers. Wrappers were good consideration when copyright holders sued successfully for full royalties.

Obligations which arise under the law  Collins v Godfrey [1831] - Policeman under court order to give evidence, promised payment by defendant. Not enforceable as he was bound by law.

Glasbrook Bros Ltd v Glamorgan CC - The official does more than is required by the existing obligation, then the promise of payment will be enforceable.  Leeds United FC v Chief Constable of West Yorkshire [2013] - Already under duty to protect. 

Obligations which are owed under a contract with a third party  [Shadwell v Shadwell] - even though the uncle was not part of the marriage contract but because he was benefitted and had a contribution in Promisee's entering into the contract, he was obliged to pay under the contract with a third party. The promise was enforceable.  (The Eurymedon (1975)) - subsidiaries of the same company. The clause was meant to be for the whole process of shipping. Promise enforceable.

Obligations to perform an existing obligation under a contract to the same contracting part  Stilk v Myrick [1809] - The performance of an existing contractual obligation could never be good consideration for a fresh promise.  Hartley v Ponsonby - If the sailors had done something over and beyond their existing obligation then the variation (the promise of extra payment) become enforceable, their extra work constituting fresh consideration for the promise to pay extra.  Williams v Roffey Bros & Nicholls

Duress  Atlas v Kafco : The claimants had a contract with the defendants to deliver baskets to Woolworth’s which the defendants manufactured. The claimants underestimated the size of the baskets and subsequently ordered the defendants to pay more. The defendants would have gone bankrupt if they had not delivered to Woolworth’s, therefore agreed the higher price. Kafco had agreed under the presence of duress; they had no time to find another supplier so had no alternative options and had protested by refusing to pay.the courts held there was no consideration under duress.  Pao On v Lau Yiu Long (1979)  The Privy Council identified 4 factors to consider in assessing whether economic duress was present:  Did the person claiming to be coerced protest?  Did that person have any other available course of action?

 Were they independently advised?  After entering into the contract, did they take steps to avoid it?

Rule: promise to accept part-payment cannot be enforced 

Pinnel’s Case [1602] – part-payment (no consideration). Payment of a smaller sum on due day can never relieve the debtor of whole debt liability  DC Builders v Rees [1965] - Builders were owed £482. Accepted £300 due to financial pressure. Sued for full balance successfully.  Foakes v Beer [1884] - Foakes owed £2,090 from court settlement and agreed to pay in instalments, with no interest. Beer demanded interested, took action and was successful.  MWB Business Exchange Ltd v Rock Advertising Ltd [2016] - It was said that the subsequent agreement conferred practical benefits upon the land owner who recovered some of the arrears immediately and benefitted because the premises would not now be left empty for a period. Because in many situations it may be to the creditor’s ‘practical benefit’ to get part of the debt, rather than to run the risk of receiving nothing at all.

Rule: past consideration is no consideration  Re McArdle [1951]: Daughter in law spent money on house to be inherited by son and 3 other children. Mother made children sign agreement to reimburse. She sued when they didn’t unsuccessfully – consideration was past.  Lampleigh v Braithwaite [1615]: Braithwaite received a king’s pardon from Lampleigh Braithwaite’s request. Braithwaite later promised £100. Lampleigh sued successfully – the service had been requested.  Re Casey’s Patent [1892]: Casey offered 1/3 share in return for manager role. Claimed unenforceable for past consideration as offer.

 Pao On v Lau Yiu Long (1979). Lord Scarman laid down three conditions which must be satisfied if the exception is to operate; 1. The act constituting the consideration must have been done at the promisor’s request. (See, for example, Lampleigh v Braithwaite (1615).) 2. The parties must have understood that the work was to be paid for in some way, either by money or some other benefit. (See, for example, Re Casey’s Patents (1892).) 3. The promise would be legally enforceable had it been made prior to the acts constituting the consideration.

The equitable concept of promissory estoppel 

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Central London Property v High Tree’s House [1949] - HTH leased flats from CLP. War made it impossible to find tenants, HTH unable to pay rent. CLP agreed to accept half-rent. 1945 war over and CLP sued for 2 years full rent and wanted return to full rent. CLP successful, but obiter, Denning said they would have failed due to estoppel if they claimed for the full period. Combe v Combe [1951] - Husband gratuitously promised £2 a week. Lack of consideration but promissory estoppel allowed her to win. However, the CA then overruled this, Denning apologized for the confusion he had caused in High Trees and outlined the doctrine. Requirements: existing contract; claimant has agreed to waive; claimant knew defendant would rely; defendant has in fact acted on reliance. Re Selectmove [1995] - Company owed IR, saying they would pay by instalments. IR stated that they would contact company if this was not satisfactory. IR insisted on immediate payment. Company argued Williams v Roffey principle: existing obligation was good consideration. Court used Foakes v Beer, distinguishing from Roffey by saying that this was debt and not goods or services. IR not bound by previous agreement. Hughes v Metropolitan Railway - Here the landlord gave his tenant 6 months to repair the property else risk forfeiture. Within the 6 months, negotiation for the sale of the lease was opened between landlord and tenant. The negotiation failed after 6 months and the tenant failed to repair. The landlord sought to enforce forfeiture. It was held that the landlord had led the tenant by his conduct to believe that the landlord would not enforce forfeiture....