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Law Notes Contract Law Notes

Requirements For Consideration Notes

Updated Requirements For Consideration Notes

Contract Law Notes

Contract Law

Approximately 1511 pages

Contract law notes fully updated for recent exams at Oxford and Cambridge. These notes cover all the LLB contract law cases and so are perfect for anyone doing an LLB in the UK or a great supplement for those doing LLBs abroad, whether that be in Ireland, Hong Kong or Malaysia (University of London).

These were the best Contract Law notes the director of Oxbridge Notes (an Oxford law graduate) could find after combing through dozens of LLB samples from outstanding law students with the highest...

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Requirements for Consideration

The basic idea

  • Chen Wishart: In order to acquire the right to enforce undertaking (promise)

    • A party must undertake to give/actually give something stipulated by other as price of undertaking (consideration)

Other requirements

  • The consideration of the promisee must move from the promisee, but need not move to the promisor

    • It could move from the promisee to a 3rd party instead and still be good consideration

      • But under the Privity rule, that 3rd party would not be able to enforce the giving of the consideration unless he fell into C(R3P) A 1999

  • Consideration must be requested by the promisor

    • Smith: All that is necessary is that D should, expressly or impliedly, ask for something in return for his promise

      • If he gets what he’s asked for = good consideration.

      • BUT must have been desired by the promisor not just relied upon as being sufficient in return for the promise

        • E.g. Combe v Combe [1951]: Husband promised to pay ex-wife 100 a year upon their divorce. He stopped. Wife sought to enforce the promise b/c said she had given consideration by not suing for maintenance.

          • CoA: not enforceable b/c husband had not requested that she not sue for maintenance

            • Thus her forbearance (consideration) RESULTED FROM his promise to pay

            • BUT was NOT GIVEN IN RETURN for it

    • Chen Wishart: but courts will sometimes imply a request for forbearance as being consideration – shows that courts have considerable leeway in deciding whether or not to imply a request by the promisor

      • and so vest the promisee’s reliance on the promisor with the label of consideration (may depend on context).

      • Alliance Bank v Broom [1864]: B undertook to provide some security for its debt to A. When A sued B for the debt, B claimed A gave no consideration for it

        • Held that b/c B’s request, A had not sued

          • Although B had not expressly requested A to forbear, the court implied such a request though B attempting to rack up some security.

  • Must result from the promise –

    • Must support the promise

      • Satisfaction of a condition only consideration if it was requested as a price of the promise by the promisor

        • Chappel v Nestle

          • E.g. 3 wrappers only valuable if they were those advertising special offer, were Nestle’s chocolate bars and were with 1s 6d postage for purpose of getting record

            • not if random wrappers for buying business instead

    • Past Consideration is not good consideration

      • Consideration has to be given in response to the promise – can’t cover something given or done before the promise was made

      • Ergo, is merely a gift and not enforceable.

      • Is past consideration if

        • Eastwood v Kenyon (1840): C was guardian of girl under age of 21. When she got married, D, her husband, promised to pay off the debt he had spent homing and educating her. D subsequently didn’t pay the money back, and C sued him.

          • Lord Denman CJ:

            • Only promises supported by consideration after promise are binding.

            • “consideration” given here long in the past of the promise to pay

              • Therefore, no consideration given for that promise

      • Major exception = Implied assumpit

        • Pao On v Lau Yiu Long [1980]:

          • Lord Scarman: An act done to make a payment or to confer some other benefit before the giving of a promise can sometimes be consideration for the promise IF

            • Act done at promisor's request,

            • Parties understood that act was to be remunerated

            • AND renumeration would have been legally enforceable had it been promised in advance.

  • Must be of some factual value

    • Essentially, it all depends on the situation what consideration is good consideration

      • Might be a benefit or detriment

        • Normally, both are present. X is deprived X* but gains Y*, Y loses Y* but gains X*

          • Might only be one though

          • E.g. Jones v Padvatton: such as detriment to promisee with no benefit to the promisor (promise to pay a sum if promisee gives up job and retrains)

      • Might be “Invented”

        • Trietel: Courts can “invent” consideration by treating act/forbearance as valid consideration even though not the promisor’s purpose to obtain it, and although no...

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