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Contract Law: Consideration, Duress, Part Payment, Promissory Estoppel Consideration
?????Consideration = 'an act or forbearance of one party, or the promise thereof, is the price for which the promise of the other is bought' (Dunlop v Selfridge, Dunedin LJ).
?????If no consideration ? promise not enforceable.
?????So a promise of the consideration (the act or forbearance) is enough to be consideration (Dunlop)
?????Rules of 'good consideration: o (1) must not be past (Eastwood v Kenyon; ? exception, Paon on v Lau Yiu Long, Lampleigh, Re Casey, Re McArdle). o (2) must move from the promisee (Tweddle v Atkinson). o (3) must be sufficient not adequate (Chappel v Nestle; White v Bluett CF Hamer v Sidway). Consideration must not be past
? Eastwood v Kenyon---an act/forbearance prior to promise to pay
= bad consideration.
? Exception---where some prior act/service was provided at promisor's request; and was always understood payment would be made
? Pao On v Lau Yiu Long, 3 conditions o (1) act must have been done at (express) request of the promisor (Lampleigh v Braithwait---Braithwait expressly requested Lampleigh to get him a pardon). o (2) Payment understood to be due (parties understood the act to be rewarded)---may be implied, eg in commercial context. o implied understanding; Re Casey's Patents, implied understanding, commercial setting---Re Casey: implied understanding of payment due to past dealings between the parties, had been paid for that work for 40 years. o cf domestic setting, less likely to be implied, Re McArdle). o (3) Contract enforceable apart from this issue: o (a) ICLR issues: eg if between family, no ICLR, no contract; o (b) offer & acceptance issues: o (c) any other consideration issues:
? The consideration must be good, aside from it being past.
? Eg, whether 'sufficient' consideration (Chappel v Nestle), or whether only public duty (Collins v Godefroy) etc etc
? So might need to discuss here whether is good consideration, eg Hartley; Wiliams v Roffey etc.
NB: not really an 'exception'---the subsequent promise to pay is simply evidence of an obligation to pay which had already arisen.
Consideration must move from the promisee (Dunlop v Selfridge)
??? ?Similar to privity, but separate---2 different principles, overlapping.
??? ?Tweddle v Atkinson: consideration was between the fathers, Tweddle JR had given no consideration (was unenforceable for 2 reasons: (1) no consideration; (2) no privity. Consideration must be sufficient, need not be adequate
? As long as courts can find value, won't assess the relative value of each party's contribution---freedom of contract.
? Must be sufficient, need not be adequate: Chappell v Nestle: wrappers were part of the consideration. A 'peppercorn' can be good consideration.
?????But consideration must be sufficient, must have some value 'in the eyes of the law'. Is forbearance good consideration?
o NO White v Bluett: giving up something you never had a legal right to in the first place = not good consideration, not a detriment. o CF, yes if: consideration if giving up legal rights--Hamer v Sidway: had given up rights which he had a right to do aged 16 (smoking/drinking/gambling) = restricting his lawful freedom = good consideration. o No consideration if promise to resist a course of action he never intended to pursue: Arralge v Costain. Existing obligations---good consideration?
?????Public duty---performance of exiting obligation o Not good consideration (Collins v Godefroy, re public duty to appear in court). o Exceptions---going beyond duties imposed by law o England v Davidson, police officer went beyond duty by providing info to a private individual. o Police, Harris v Sheffield United---police, by protecting safety of supporters inside th stadium = 'special serivces', over & above normal duties---Sheffield Utd had to pay. o Parental, Ward v Byham: public duty to look after child; but not to keep their children happy. So was consideration.
? Courts use sufficiency of consideration as a way to decide along policey concerns. Performance of an existing obligation to a third party
??? ?Doing something one was already bound to do under a preexisting contract with a 3rd party.
2 ??? ?Can be good consideration, Scotson v Pegg.: delivery of coal to Pegg was god consideration for Pegg's promise of a discount; immaterial that S had previously contracted with C to deliver the coal to Pegg. Pegg still got a benefit.
? ?? ? The Eurymedon (PC): PC applied Scotson, where D already bound by a contract with a 3rd party to unload goods. The consideration given to the promisee = the right to sue, the benefit of a direct obligation. Promi
? ?? ? Pao On v Lau Yiu Long: a promise (CF actual performance) to perform a pre-existing contractual duty owed to B = good consideration to C.
??? ?Promisor gets benefit of 2 separate contracts for doing 1 obligation; but also gets double liability. Existing obligation within a contract (1) Stilk general rule; (2) Hartley legal benefit; (3) Roffey practical benefit
?????Performance of existing obligation = not good consideration (Stilk v Myrick): re ship sailors, 3 deserting sailors, sailed ship back: had only performed existing obligations, not entitled to extra money. o [[NB: now, Stilk v Myrick would be covered by doctrine of economic duress. So before that, consideration was used to police duress.]]
?????Exception (1), Legal benefit, 'over & above'---Hartley v Ponsonby: o 16 sailors deserted; dangerous journey on way back, ship seriously undermanned---legal benefit, 'over and above' original obligations? good consideration for a fresh contract.
?????Stilk general rule + Hartley exception approved in The Atlantic Baron.
?????Exception (2), practical benefit, Williams v Roffey o Facts: Williams a carpenter; changed working plays with extra payment promised; o Roffey obtained practical benefits: avoided losing money under 'penalty' clause with the owner; obviated disbenefit of finding alternative contractor; benefited from altered working arrangements. o = good consideration. o Court interpreted Stilk as guarding against duress; and now we have separate doctrine of economic duress. o Test, Glidewell LJ: o (1) Promisee has an existing contract with promisor to supply goods or services; o (2) Promisor has a reason to doubt that promisee will, or will be able to, complete his obligations.
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