Currie v misa PDF

Preview

Summary

consideration...

Description

The development of consideration from Currie v Misa to the present A contract was defined to be a legally enforceable agreement with several essential requirements. The ingredients are namely, consideration to support the promise that it is sought to enforce or that promise contained in a deed , and there must be an intention to be legally bound. Regarding the first element, consideration, which will be discussed in this essay, means an act or a promise given in exchange for the promise . Its development changed by the gradual disregard of ‘’benefit ” and ‘‘ detriment.” In earlier times when the act was done, in order to be a good consideration, it was required to be a benefit to the promisor or a detriment to the promisee. But nowadays, people suggest that an act may be good consideration even though it is not a benefit to the promisor nor a detriment to the promisee. Investigating into the case of Currie v Misa ,which was considered whether the existing debt constituted sufficient consideration for the security so as to constitute a legallyenforceable contract for the promisor. At the beginning, a company called Lizardi sold a number of bills of exchange which was drawn from a banking firm owned by Currie to Misa. He promised to be pay on the next day. However, Lizardi was in substantial debt to Currie’s bank and was being pressed for payment. A few days later, upon paying in the cheque, Misa learned of Lizardi’s stopped payments and outstanding debts, instructing his bankers not to honour the cheque. The question arose as to whether the cheque was payable, specifically as to whether the sale of an existing debt formed sufficient consideration for a negotiable security, so as to render the promisor to whom it was paid, Currie, a holder for the value of the cheque. The Court held that consideration must ‘’consist either in some right, interest, profit, or benefit accruing to the one party, or some forbearance, detriment, loss, or responsibility, given, suffered, or undertaken by the other.” Therefore, there was an absence of any consideration or the making or payment of the cheque by Misa. From this case , it is clear that although the act or promise said to constitute the consideration may be both a detriment to the promisor and a corresponding benefit to the promise, it is not necessary to have both benefit and detriment.

By the changing of time along with the development of the doctrine of consideration, it was stated that consideration does not need to be adequate and it must have economic value are the two essential requirements.

Consideration does not need to be adequate which means consideration provided by either party does not need to be equivalent to the other party’s consideration. In Thomas v Thomas, a situation arose that the widow promised to pay £1 per annum for the house as

ground rent and to maintain the property in good and fine repair. It was found that the property’s regular rent cost could have afforded mush higher rates. The courts held that adequate consideration is not necessary because the court is unwilling to interfere with bad bargains, as parties to a contract are typically free to bargain on whatever terms they wish.

The second requirement in which consideration must have value , is demonstrated in the case of White v Bluett. The father in this case waived a debt owned to him by his son, in return for his son to stop complaining about his will. The court held that the son had not provided any consideration for such a promise by his father because the son was not under any legal duty and rights to refrain from complaining. By looking at another case, Chappel & CO Ltd v Nestle Co Ltd, the sweet wrappers being returned to Nestle in an attempt to win a prize were considered to have economic value. These two cases showed that consideration must have sufficiency which are expressed in economic terms.

In conclusion, from the case of currie v misa to more modern cases, the doctrine of consideration had changed to be clearer and more specific. It is important for contracts to include consideration as consideration is one of the fundamental steps provided by the parties in order to determine its legal enforceability....