Consideration (1) - School of Law

Comprehensive flashcards covering the definition and key rules of the doctrine of consideration as presented in standard contract law lectures.

Currie v Misa ($1875$)

The case where Lush J defined consideration as 'some right, interest, profit, or benefit' to one party, or 'some forbearance, detriment, loss, or responsibility' suffered or undertaken by the other.

Sir Frederick Pollock's Definition

Defined consideration as 'the price for which the promise is bought,' an act or forbearance (or promise thereof) given for value to make a promise enforceable.

Dunlop Pneumatic Tyre Co. Ltd v Selfridge & Co. Ltd [$1915$]

The case in which Lord Dunedin approved Pollock's definition of consideration as the price for which a promise is bought.

Gratuitous Promises

Promises made without consideration which the law generally will not enforce.

Deed

A formal legal document used to enter a contract where consideration is not required for the agreement to be enforceable.

Rule $1$ of Consideration

Consideration may be executed or executory, but it cannot be past.

Rule $2$ of Consideration

Consideration must move from the promisee.

Rule $3$ of Consideration

Consideration must be sufficient but need not be adequate.

Executory Consideration

Consists of a promise made in return for another promise where both promises are still to be performed.

Executed Consideration

Consists of an act performed in return for a promise.

Past Consideration

An act done before a promise is made, which is generally not sufficient to support that promise.

Lampleigh v Braithwaite ($1615$)

Established that a promise to pay for a past service is enforceable if the service was provided at the promisor's request with an implied promise of payment.

Pao On v Lau You Long ($1980$)

Identified three requirements for an implied promise: the act was at the promisor's request, the parties understood it would be remunerated, and payment would have been enforceable if promised in advance.

Tweddle v Atkinson ($1861$)

Case confirming that the promisee must provide consideration; a son could not enforce an agreement between fathers because he was not the one who paid the price.

Sufficient Consideration

Consideration that has some value in the eyes of the law, even if that value is negligible.

Adequate Consideration

Consideration that is equal in value to the thing for which it is exchanged; the law does not require this for a contract to be binding.

Economic Value

A requirement for sufficiency suggested in Thomas v Thomas ($1842$) and White v Bluett ($1853$), though cases like Ward v Byham ($1956$) suggest it may be unnecessary.

Chappell & Co v Nestle ($1960$)

A case illustrating that consideration does not need to be adequate and that its economic value can be negligible.

Existing Duties

Tasks one is already legally or contractually bound to perform; promising to perform these is not considered sufficient consideration.