When do parties provide sufficient consideration in a bilateral contract?
In a bilateral contract, consideration is the exchange of promises.
A promise to do something in the future is valid consideration (executory consideration).
The contract becomes legally binding when the promises are exchanged, not when they are performed.
Actual payment or performance is not required for consideration to exist.
Result here:
The client’s promise to pay and the company’s promise to supply and install the CCTV
= sufficient consideration.
The agreement is binding immediately.
How does promissory estoppel affect a landlord’s right to claim rent arrears after agreeing to a temporary rent reduction?
General rule: Part payment of a debt is not good consideration for waiving the balance (Foakes v Beer).
Exception: Promissory estoppel applies where:
The landlord promises to accept less,
Intends the tenant to rely on it,
The tenant does rely on it,
It would be inequitable to go back on the promise.
Where the promise is clearly temporary:
The landlord cannot claim arrears for the period covered by the promise.
The landlord can resume full rent once the circumstances end.
No notice is required unless agreed.
e.g full rent must resume when the road is fixed.
