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Consideration Notes

GDL Law Notes > GDL Contract Law Notes

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A more recent version of these Consideration notes – written by Cambridge/Bpp/College Of Law students – is available here.

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Revision: Contract

[CONSIDERATION]

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Classic definition of valuable consideration in Currie v Misa

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Pollock's definition: 'an act or forbearance of one party, or the promise thereof, is the price for which the promise of the other is bought, and the promise thus given for value is enforceable': adopted by HL in Dunlop v Selfridge

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Executory consideration: parties make promises to do something in the future after the contract is formed: a bilateral contract usually involves executory consideration, e.g. sale of goods

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Executed consideration: Where consideration has already been performed at the time of the formation of the contract

Rules

1. Consideration must not be past

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Consideration generally cannot happen prior to the promise to pay: Eastwood v Kenyon

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Roscorla v Thomas: C bought a horse and after the purchase the D promised the C that the horse was 'sound and free from vice' - the horse turned out to be vicious but D was not bound as there had been no consideration to support the promise: the sale itself was not valuable consideration as it was completed prior to the promise being given

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Exceptions: Where past consideration was given at the promisor's request and it was understood that payment would be made - o

Lampleigh v Braithwait: B had killed a man and asked L to go to King to obtain a pardon: L went to great lengths to do so and then B promised to pay PS100. Held: that L's actions were good consideration as there was an implied understanding that payment would be made and the later promise was simply an express confirmation to fix the price

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Implication that there was an understanding that payment would be made it more likely in commercial contexts: Re Casey's patents - past service raises implication that at the time it was rendered it was to be paid for

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Pao On v Lau Yiu Long: PC - an act done before the giving of promise can be consideration IF:

1. Done at promisor's request 1

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