consideration at common law

what is a valuable consideration

·       A valuable consideration, in the sense of the law, may consist either in some right, interest, profit or benefit accruing to the one party or some forbearance, detriment, loss or responsibility, given, suffered or undertaken by the other.

·       The benefit or detriment must be legally sufficient

·       ‘Sufficient’ does not mean that consideration needs to be adequate; in other words, the benefit or detriment need not be equivalent in value to that which is received in return. 

what does a past consideration refer to

Past consideration refers to a time before the making of a promise

what are executed considerations

·       Executed considerations is consideration performed after the promise and in return for it. 

what is the past consideration rule

·       Past consideration rule= consideration must be requested by the promisor as the price of the promise. 

why can Performance of an existing non-contractual duty generally cannot in itself form good consideration

·       the promise to pay a witness who was already under a public duty to give evidence lacked consideration. The witness did nothing above what he was already obliged to do and therefore he did not receive or incur a legal benefit or detriment in return for the promised paymentv

describe the case of Chappell v. Nestlé [1960]

·       Marketing campaign for Nestle- coupon through postal order if sent three chocolate wrappers. Chappel sued Nestle for use of their photographic rights.

·       All about calculating on what fee they had to pay to get a licence

·       Nestle argued that wrappers formed part of the consideration

·       The deal was wrappers in exchange for record.

·       Whatever the parties agreed, it will do.

describe the case of Re McArdle [1951]

Re McArdle- family dispute about late families bungalow – deal is struck that a bigger sum would go to one of the children as they had spent more money improving the bungalow. Other kids go back on concession- ends up in courts- the child who was going to get more money was unable to prove a good consideration for the promise of the others to let them have that  bigger share. This is because it was in the past- consideration is price of promise- cant be a promise of promise for something that you did in the past.

describe the case of Stilk v. Myrick (1809)

Stilk v Myrick 1809: sea men had signed a trip on a ship to the Baltic and back. During part of the journey they pull in somewhere but some of the crew go missing, sea men are paid at end of voyage so he captain wanted to find new men. He tells the remaining sailors that if they sail without the other two sailors, he will split their pay between them. Captain then goes back on his promise and does not pay the sailors extra. Two different lord reports- one says it would be contrast to public policy to allow a contract of this nature. Other report says that it was an existing contractual obligation and they weren’t promising to do anything they were obliged to do.

describe the case of Foakes v. Beer (1884)

The respondent, Beer, loaned the appellant, Dr Foakes, £2090 19s. When he was unable to repay this loan she received a judgment in her favour to recover this amount. The pair then entered an agreement whereby ‘in consideration’ of an initial payment of £500 and ‘on condition’ of six-monthly payments of £250 until the whole amount was repaid, she would not enforce her judgment against him. Foakes made these regular payments until the entire amount was repaid. However, he had not paid any interest on the judgement debt, which Beer was entitled to under statute. This interest totalled £302 19s 6d.

The House of Lords held that the respondent’s promise not to enforce the judgment was not binding as Dr Foakes had not provided any consideration

Lord Selborne said that there had to be

‘some independent benefit, actual of contingent, of a kind which might in law be a good and valuable consideration’.

describe the case of Tweddle v. Atkinson (1861)

The son and daughter of the parties involved in this dispute were getting married. As such, the father of the groom and father of the bride entered into an agreement that they would both pay sums of money to the couple. Unfortunately, the father of the bride died before he paid the money to the couple and the father of the son died before he could sue on the agreement between the parties. As a result of this, the groom brought a claim against the executor of the will for the payment that was previously agreed between the fathers.

The primary issue for the court was whether or not the son could, as a third party to the agreement, enforce the contract between the fathers, which was ultimately for the benefit of him and his wife

The groom’s claim was rejected by the court. It was held that the groom was not a part of the agreement between the fathers and he did not provide any consideration for the promise made by the father of the bride. Also, as a stranger to the contract, the son could not enforce it. On this basis, the court found in favour for the executor of the will.

describe the case of Shanklin Pier Ltd v. Detel Products Ltd [1951] 2

The Plaintiffs were owners of a pier in Shanklin on the Isle of Wight. They entered into a contract with contractors to have the pier repaired and painted. Under the contract the plaintiff had the express right to alter the contract. The Defendant company director approached the Plaintiffs with a new painting product for the pier. After much persuasion, the Plaintiffs amended their contract with the Contractors to allow for the paint in the renovation. After several months, the paint flaked off and did not last. The Plaintiffs brought a claim for damages.

question- Whether the Plaintiff was entitled to bring a claim against the Defendant company, who was not party to the contract to undertake renovations.

The Defendant was found to be liable given he had provided an express warranty over the paint to the Plaintiffs, who in consideration of the warranty caused the contractor to buy the paint from the Defendant also and suffer the same damage, by reason of a breach of warranty

describe the case of Jackson v. Horizon Holidays Ltd [1975]

Mr Jackson booked a holiday through Horizon Holidays, a travel company, for him and his family and paid approximately £1,400. He had provided explicit details about the family’s accommodation, amenity and dietary requirements and preferences, which had been accepted by Horizon. Shortly before their departure, Horizon informed Jackson that the hotel they had booked was now unavailable and provided an alternative for £1,200 which they proposed to be just as good as the hotel that was originally booked. Upon arrival, the Jacksons found that the new hotel was unsatisfactory. This caused them distress, vexation, discomfort and inconvenience. They brought action against Horizon for misrepresentation.

question- Whether damages are recoverable by person making contract to recompense his whole family.

The appeal by Horizon was dismissed. The Jacksons had made a contract with Horizons for a family holiday and was entitled to recover damages not only for a breach of contract by Horizons, but for the discomfort and distress the breach of contract had caused him.