Contract Law 2026: Topic 3 - Consideration and Deeds Under Seal

Comprehensive vocabulary flashcards covering Topic 3 of Contract Law 2026: Deeds Under Seal, Consideration, Past Consideration, Sufficiency vs. Adequacy, Existing Duties, and the Rule in Pinnel's Case.

Deed Under Seal

A formal written promise recognized as enforceable at common law without consideration. Historically impressed with wax using a signet ring, it can now be executed by placing a red sticker on the paper or drawing a circle with "LS" stamped on it, and takes effect upon delivery.

Locus Sigilli (LS)

A Latin phrase meaning "the place of the seal"; used in modern legal practice by drawing a circle stamped with "LS" to affix a seal to a document.

Friel and Lord Wilberforce's Criticisms of Deeds Under Seal

Notable legal criticisms of contracts under seal: Friel argued that the concept ought to be abolished, and Lord Wilberforce characterized it as "mumbo-jumbo" because the ease of creating one today no longer ensures parties displayed any greater intention to be legally bound than in an unsealed contract.

Consideration

The doctrine used to distinguish between enforceable and unenforceable agreements; defined in simple terms as the price paid for the promise, requiring that the promisor receives a benefit or the promisee suffers a detriment.

Gratuitous Promise

A promise made without consideration in return, which the law will not enforce unless it is made under seal.

Moral Consideration

The historic notion that a moral obligation to keep a promise constitutes sufficient consideration; rejected as alien to English law in Eastwood v. Kenyon (1840).

Eastwood v. Kenyon (1840)

The case in which a guardian raised a loan to pay for an heiress's education to improve her marriage prospects, and she later promised to repay him upon coming of age; Lord Denman dismissed the action, ruling that a moral obligation does not constitute valid consideration.

Rule One of Consideration

The fundamental contract law rule stipulating that consideration must move from the promisee; a person can only enforce a promise made to them if they personally provided the consideration.

Tweddle v. Atkinson (1861)

A case where two fathers agreed to pay money to their married children, and the husband attempted to sue his deceased father-in-law's estate; Wightman J ruled he could not recover because no stranger to the consideration can take advantage of a contract, even if made for their benefit.

McCoubray v. Thompson (1868)

An Irish case where a landowner ($G$) divided a farm valued at $£196$ by transferring the entire property to the defendant on the condition that the defendant pay $£98$ to the plaintiff; the plaintiff's claim failed because consideration moved from $G$, not from the plaintiff.

Atiyah's Observation on Consideration Moving from the Promisee

The critical observation stating that "not a single satisfactory modern illustration of this supposed rule has ever been cited by those who give it allegiance."

Rule Two of Consideration (Past Consideration)

The principle that consideration must not be past; if a promise is made after the performance of an act that was gratuitous and not part of an original bargain, the act is past consideration and constitutes no consideration at all.

Roscorla v. Thomas (1842)

An Irish example of past consideration where the defendant warranted a horse to be sound and free from vice after the plaintiff had already purchased it for $£30$; the warranty was unenforceable because it was subsequent to and independent of the sale.

Provincial Bank of Ireland v. Donnell (1932)

An Irish decision holding that a wife's agreement to provide security for her husband's existing overdraft was past consideration, while her promise concerning future advances lacked consideration because the bank retained total discretion over whether to make them.

Law Society of Ireland v. O'Malley [1999]

An Irish Supreme Court case where Lynch J held that past support and maintenance provided by a wife's family (the O'Conghaile family) was past consideration, and therefore could not support an undertaking to pay them damages recovered from a personal injury action.

Re McArdle [1951]

An English case where a woman carried out home improvement work on a jointly owned family house, and relatives subsequently signed a promise to reimburse her; the agreement was unenforceable because the work was completed before the promise was made.

Rule in Lampleigh v Braithwait (1615)

An exception to the rule against past consideration where a past service performed at the promisor's request carries an implication at the time it was rendered that it was to be paid for, making it sufficient consideration for a subsequent promise of payment.

Pao On v. Lau Yiu Long [1980] Three-Part Test

Lord Scarman's criteria under which a past act can constitute consideration: (i) the act was done at the promisor's request; (ii) the parties understood the act was to be remunerated by payment or benefit; and (iii) payment or benefit would have been legally enforceable had it been promised in advance.

Rule 3 of Consideration (Adequacy of Consideration)

The doctrine stating that consideration need not be adequate; courts will not evaluate or measure the comparative value of exchanged promises as long as the consideration has some value.

Peppercorn Rent

A nominal consideration (such as a rent of $£1$ per annum) that is legally sufficient to support the grant of a lease on property worth thousands, demonstrating that courts do not inquire into adequacy.

Haigh v. Brooks (1839)

A case demonstrating that courts do not evaluate adequacy, holding that the surrender of a worthless piece of paper at the defendant's request was good consideration for a promise to pay $£10{,}000$.

ICS Building Society v. Grant [2010]

An Irish High Court case in which Charleton J emphasized that the law never enquires into adequacy, noting that "people can enter into bad bargains" and can lawfully sell a motor manufacturing company for a billion Euros or for ten Euros.

Rule 4 of Consideration (Sufficiency of Consideration)

The requirement that while consideration need not be adequate in financial equivalence, it must be sufficient, meaning it must be something of value in the eyes of the law.

Economic Value Requirement

The principle that to qualify as valid consideration, an act or promise must usually possess some economic or tangible value, even if that value cannot be quantified precisely.

White v. Bluett (1853)

A case where a son's promise to stop complaining to his father about how the estate was distributed was held not to be valid consideration for discharging his debt, because refraining from making complaints has no economic value.

O'Neill v. Murphy [1936]

A Northern Ireland case in which a builder performed work in exchange for prayers said by Father Murphy; Andrews LJ ruled that a mere promise to say prayers or cause prayers to be said does not amount in law to valuable consideration.

Pando v. Fernandez (1984)

A New York case where a minor claimed a share of a $\$2.8\text{ million}$ lottery win for praying to Saint Eleggua to cause the numbers to win; Greenfield J dismissed the claim, noting that one cannot prove prayers caused the result and that theology is to be protected against the law as law is from theology.

Chappell v. Nestle [1960]

A House of Lords decision holding that three used chocolate bar wrappers formed part of the consideration alongside $7\text{ pence}$ for a music record, because the company requested them to induce sales, establishing that contracting parties can stipulate whatever consideration they choose.

Invented or Illusory Consideration

A sham or fictional consideration that is stated in a contract but was never paid and never intended to be paid; such consideration is legally ineffective and causes the transaction to be treated as a gift.

Revenue Commissioners v. Moroney [1972]

An Irish Supreme Court decision where a father purported to sell a pub to his two sons for $£16{,}000$ to avoid estate duty; the court held that because the money was never paid or intended to be paid, it was a sham transaction lacking consideration and treated as a gift.

Forbearance as Consideration

The act of giving up or refraining from exercising a lawful right or freedom of action within certain prescribed limits, which the law recognizes as good and sufficient consideration.

Hamer v. Sidway (1891)

A New York case where an uncle promised his nephew $£5000$ if he refrained from drinking alcohol, smoking, swearing, and gambling until age $21$; Parker J held that restricting lawful freedom of action upon faith of the agreement constituted good consideration.

Existing Public Duty Rule

The legal rule providing that merely performing or promising to perform an obligation already imposed on a party by law does not constitute good consideration.

Collins v. Godefroy (1831)

A case establishing that a promise to pay a $6\text{-guinea}$ attendance fee to a witness who had been subpoenaed to give evidence was unenforceable, as the witness was already under an existing legal duty to attend court.

Glasbrook v. Glamorgan [1925]

A House of Lords case where police provided a requested standing garrison at a strike-bound coal mine rather than a mobile patrol; providing more protection than the police deemed necessary exceeded their public duty and constituted valuable consideration.

Harris v. Sheffield United Football Club [1987]

A case holding that police guarding a private football ground during home matches were providing special police services beyond their general duty to preserve order, rendering the club's promise to pay overtime and expenses enforceable.

McKerring v. The Minister for Agriculture [1989]

An Irish High Court case where O'Hanlon J ruled that a farmer's strict compliance with all the rules of a statutory TB eradication scheme provided sufficient consideration to enforce grant payments under contract.

Stilk v. Myrick (1809)

The classic English contract case establishing that performing an existing contractual duty owed to the promisor is not good consideration; remaining crew members who sailed short-handed after two sailors deserted were already bound by their contract to face emergencies.

Williams v. Roffey Brothers [1990]

The Court of Appeal decision establishing that where a party renegotiates a contract to pay additional money to ensure timely performance, the practical benefit obtained or disbenefit avoided can constitute valid consideration in the absence of economic duress or fraud.

Glidewell LJ's Practical Benefit Test

The six-step framework from Williams v. Roffey Brothers outlining when a practical commercial benefit (or avoiding a disbenefit, such as penalty clauses) can serve as consideration for an additional payment promise to a party already under a contractual obligation.

Rule in Pinnel's Case (1602)

The common law rule establishing that payment of a lesser sum on the day in satisfaction of a greater liquidated debt cannot be satisfaction of the whole, because the agreement lacks consideration.

Liquidated Debt

A debt that is ascertained as to amount and undisputed as to existence.

D and C Builders v. Rees [1965]

A case where builders owed $£482$ reluctantly accepted an offer of $£300$ in full settlement under financial distress; the Court of Appeal allowed them to recover the remaining balance under the rule in Pinnel's case.

Foakes v. Beer (1884)

A House of Lords decision upholding the rule in Pinnel's case, holding that a judgment creditor was entitled to recover $£360$ in statutory interest on a $£2090$ debt despite an agreement accepting payment of the principal in installments without proceedings.

Heatherridge Associates Ltd. v. Curran [2019]

A modern Irish High Court decision where Meenan J applied Pinnel's case, ruling that an agreement to reduce an architectural debt exceeding $€1\text{m}$ to $€140{,}000\text{ plus VAT}$ in return for a repayment schedule lacked consideration and was unenforceable.

Introduction of a New Element (Exception to Pinnel's Case)

An exception to the rule in Pinnel's case recognized in Corporation of Drogheda v. Fairtlough (1858), where a debtor tenders a smaller sum accompanied by a chattel, different method, or collateral advantage that the creditor accepts in full satisfaction.

Part Payment by a Third Party (Exception to Pinnel's Case)

The rule established in Welby v. Drake (1825) providing that if a creditor agrees to accept a lesser sum from a third party in full discharge of a debtor's liability, the creditor cannot sue for the balance because doing so would commit a fraud on the third party.

Composition with Creditors

An agreement where multiple creditors each agree with a debtor to accept a fixed percentage of their debt in full satisfaction; enforceable despite the absence of consideration from the debtor because allowing one creditor to sue for the balance would constitute a fraud on the other creditors.

Argument ab inconvenienti

A legal argument based on the hardship or inconvenience of the alternative; applied to the second justification of composition agreements, which scholars suggest evades rather than meets the doctrinal difficulty regarding consideration.