Consideration 3B

Question 1

What is the definition of Consideration?

Answer 1

Something of economic value being exchanged between the parties.

Question 2

What is ‘good’ consideration?

Answer 2

Valid

Question 3

What is the first rule of consideration?

Answer 3

It must be sufficient but need not be adequate (equal).

Question 4

What 2 cases can you use with the first rule of consideration?

Answer 4

Chappell v Nestlé
Or
Thomas v Thomas

Question 5

Why doesn’t the court care about the consideration being equal?

Answer 5

Freedom of contract
Parties should be free to make their own decisions even if they are bad.

Also
It is sometimes difficult to determine value at a particular time.

Question 6

What does Jones v Padvatton say?

Answer 6

Even giving up something of value (even if it is not given to the other party) can be consideration.

Question 7

What does White v Bluett say?

Answer 7

Love and affection has no economic value.

Question 8

What does Ward v Byham say?

Answer 8

Lord Denning’s mistake:
Looking after the daughter and keeping her happy did have economic value.
This case will NOT be followed in the future.

Question 9

What is the second rule of consideration?

Answer 9

It must not be given in the past.

Question 10

When do you use the second rule of consideration?

Answer 10

Only when relevant.

Question 11

Which case can be used in relation to the second rule of consideration?

Answer 11

Re McArdle

Question 12

How can we evaluate Re McArdle?

Answer 12

There was clear evidence of an agreement as it had been put in writing so it would be reasonable to expect she would have a legal right to the money promised.

However, the siblings did not enter freely into the contract - they felt they had no choice due to emotional pressure. This goes against freedom of contract.

Question 13

What is the only exception to the past consideration rule?

Answer 13

Implied promises before consideration.

Question 14

What are the two ways to prove an implied promise?

Answer 14

Work Requested
Work from employment

Question 15

What case is used for work requested within implied promises?

Answer 15

Lampleigh v Braithwait

Question 16

What did Lampleigh v Braithwait say?

Answer 16

When the work is requested it is implied that a form of reward would be given.

Question 17

What case is used for work from employment within Implied promises?

Answer 17

Re Casey’s Patents

Question 18

What did Re Casey’s Patents say?

Answer 18

It is reasonable for an employee to expect to be rewarded for their work.

Question 19

Why is implied promises important in commercial cases?

Answer 19

There are no clear terms regarding exact price required for goods/services. There may be no mention of specific payment until they have been provided.

Question 20

What is the third rule of consideration?

Answer 20

Performance of an existing legal or contractual duty is not good consideration.

Question 21

What case is used for existing legal duty?

Answer 21

Collins v Godefroy

Question 22

What does Collins v Godefroy say?

Answer 22

If a person has a legal or public duty to do something, doing that thing and no more would bring no economic value.

Question 23

What is the only exception to the 3rd rule of consideration for public/ legal duty?

Answer 23

Going beyond the duty.

Question 24

What case is used for going beyond the legal/public duty for the 3rd rule?

Answer 24

Glasbrook Bros

Question 25

What does Glasbrook Bros say?

Answer 25

Where the person goes beyond their legal obligation, it is good consideration.

Question 26

What case is used for existing contractual duty in the 3rd rule?

Answer 26

Stilk v Myrick

Question 27

What did Stilk v Myrick say?

Answer 27

Where a person does just slightly more than they agreed or what would be expected of them in an emergency, nothing of economic value has been added.

Question 28

What is the first exception for existing contractual duty in the 3rd rule?

Answer 28

Going beyond the duty

Question 29

What case is used for going beyond the existing contractual duty in the 3rd rule?

Answer 29

Hartley v Ponsonby

Question 30

What does Hartley v Ponsonby say?

Answer 30

Where there is drastically more work and the person is doing so much more than originally expected, it is good consideration.

Question 31

What is the second exception to the existing contractual duty in the 3rd rule?

Answer 31

Practical Benefits

Question 32

What case is used for the exception of Practical benefits in existing contractual duty of the 3rd rule?

Answer 32

Williams v Roffey Bros

Question 33

What does Williams v Roffey Bros say?

Answer 33

By doing the work on time, there is a benefit for the claimant therefore it is considered good consideration.

Question 34

Is the Williams v Roffey exception good or bad?

Answer 34

It is bad because it is very flimsy. The fact that they had to 'come up with' something so that the contract didn't fail means that it was not based on logic and it makes the law too rigid.

Question 35

What is the third exception to existing contractual duty in the 3rd rule?

Answer 35

Third party contracts

Question 36

What case is used for the exception of third party contracts in contractual duty of 3rd rule?

Answer 36

Scotson v Pegg

Question 37

What does Scotson v Pegg say?

Answer 37

Doing the same thing but for different people is good consideration for both agreements.

Question 38

Is the 3rd exception of third party contracts good or bad?

Answer 38

Bad because again the courts are having to 'make up' consideration where it doesn't exist.

Question 39

What is the 4th rule of consideration?

Answer 39

Consideration must move from the promisee.

Question 40

Why does the 4th rule exist?

Answer 40

So that no party can sue if they have not given any consideration or entered a contract. PRIVITY OF CONTRACT

Question 41

What case is used for the 4th rule?

Answer 41

Tweddle v Atkinson

Question 42

What does Tweddle v Atkinson say?

Answer 42

No consideration had been given so there was no right to enforce the agreement.