consideration - FORMATION

Question 1

define consideration

Answer 1

-is the favour for something promised or the price paid for goods and services
SO IT IS THEREFORE THE PRICE PAID BY ONE PARTY IN RETURN FOR THE ACT OR PROMISE OF OTHER PARTY

Question 2

facts about consideration

Answer 2

cannot be in past

• must be sufficient but need not be adequate
• performing an existing duty is not valid consideration
• promise to accept part of payment of an existing debt is not valid consideration

Question 3

CASES FOR CONSIDERATION (4)

Answer 3

1. Currie v Misa, defined consideration as a favour for something promised or price paid for goods received (gratuitous gift not consideration)
2. Re McArdle, promise to make payment occurred after consideration, past consideration not valid, promise to make payment not binding
3. Re Casey’s Patents, past consideration unless claimant had some reason to believe that payment in some form would be made
4. Stilk v Myrick, crew under existing duty to work ship back to london; had not provided consideration for extra money SO EXTRA CONSIDERATION IS NEEDED (PERFORMING AN EXISTING DUTY IS NOT VALID)

Question 4

CASES FOR CONSIDERATION Chappel v Nestle

Answer 4

MUST BE SUFFICIENT BUT NEED NOT BE ADEQUATE

wrappers did form part of consideration as object was to increase sales and therefore provided value, wrappers being thrown away did not detract from this

MUST BE SUFFICIENT BUT NEED NOT BE ADEQUATE

Question 5

CASES FOR CONSIDERATION Collins v Godefroy

Answer 5

police officer under court order to give evidence at trial, D promised to pay officer some money to attend
- no consideration as policeman was already under duty to be in court

PERFORMING AN EXISTING DUTY IS NOT VALID

Question 6

CASES FOR CONSIDERATION Foakes v Beer

Answer 6

B loaned F £2090, F unable to pay, reached agreement staged payment and no legal action, paid full amount back in instalments but no interest

PROMISE TO ACCEPT PART PAYMENT OF AN EXISTING DEBT NOT VALID

Question 7

two exceptions to PROMISE TO ACCEPT PART PAYMENT OF AN EXISTING DEBT NOT VALID

Answer 7

1. where creditor suggests to debtor that they can clear the debt in full with something other than money
   2 Doctrine of promissory estopell but you cannot rely on this for economic duress (promise enforceable by law even if made without consideration- Central London Property Trust Lord v High Trees)

Question 8

Esso Petroleum Co Ltd v Comrs of Customs and Excise

Answer 8

disguised way of doing business can be legally binding (so if someone is giving a free gift in order for business to be popular again, and they try and say they’re not giving it away again, it can be legally binding)