Buisness law lesson 5

What is consideration

Something of value being exchanged between parties in return for a promise, making the promise legally enforceable

Difference between executed and excecutory consideration

Executed is an act being completed in exchange for a promise, executory both parties promise to perform something in the future

What is past consideration

An act completed before a promise is made, generally not valid consideration

What was established in remcardle 1951

Work completed before a promise of payment was made counted as past consideration, so the later promise wasn’t enforceable

What does ‘Consideration must be sufficient but need not be adequate ‘ mean

Consideration must have some legally recognised value, but it does not need to be equal in economic value

What is the rule regarding performing a existing public duty

Not valid consideration for an additional payment

What is the rule developed in pinnels case regarding part payment

It is not sufficient consideration for a promise to cancel the remaining balance

Name three exceptions to the part payment rule

Paying a lesser sum earlier than originally agreed, Goods instead of money, paying in a different agreed way

What is promissory estoppel

An equitable doctrine that can prevent someone from withdrawing a clear promise when another party has relied on it and withdrawal would be unfair

What are the four key requirements of promissory estoppel

• an existing contractual relationship

• A promise to waive contractual rights

• Knowledge that the other party would rely on the promise

• Actual reliance on the promise

What is doctrine of privity of contract

Only parties who are involved in the contract can generally enforce its terms of be subject to its obligations

What does the rights of third parties act 1999 allow

It allows certain third parties to enforce contractual terms where the contract expressly permits enforcement or a term benefits them

How must a third party be identified under the act

By name, member of class, or by a particular description

What is intentional to create legal relations

Their agreement should create legally binding rights and obligations

What is certainty of terms

The requirement that contractual terms must be sufficiently clear and complete for the courts to understand and enforce the agreement

What is the difference between void and voidable contracts

Void - a contract that has no legal effect from the beginning, voidable is a contract that remains valid unless chosen to set it aside