Consideration

Hickman v Haynes (1875)- example of waiver

Buyer asked seller to deliver goods later than originally agreed, then when receiving refused to accept it. Seller sued, court upheld claim as late delivery was on buyers request.

What must consideration be in return for?

Consideration must be in return for the promise or act of the other party (not the past for another reason).

What is executed consideration?

Executed consideration is where at the time of the formation of the contract the consideration has already been performed. Usually seen in unilateral contracts.

Promissory estoppel-

Legal principle: Under the doctrine of promissory estoppel, a contracting party who promises not to enforce a contractual right will not be able to enforce the right later on if it would be inequitable to do so, and the promise has been replied upon by the other party.

Requirements for the doctrine of promissory estoppel to apply-

- There must be a clear or unequivocal promise or representation (Collin v Duke of Westminster) - ^.. which is intended to affect the legal relationship between the parties (Spence v Shell) -^... which indicates that the promisor will not insist upon his strict legal right against the promisee in relation to the promise (Hickman v Haynes) -The promisee must have acted in reliance to that promise (HIckman v Haynes) - It must be inequitable for the promisor to go back on that promise (Hickman v Haynes) - Doctrine can only be used as a defence, the general equitable maxim that 'equity is a shield, not a sword' (Combe v Combe) -Doctrine is equitable, so only available at the discretion of the courts.

Exceptions to the rule in the Pinnel's case

Disputed claims- the rule in the Pinnel's case does not apply where there is genuine dispute over the money owed. Unliquidated claims- Where the value of a claim is uniliquidated (not known), so a part payment as shown in Pinnel's can not occur. Composition agreements- where money is owed to several people, may offer to pay each one a percentage of their claim. Payment by a third party- A creditor who accepts part-payment from a third party, in full settlement of the debtors liability, cannot then sue for the outstanding payment.

What is executory consideration?

Executory consideration is where consideration is to be done in the future after the contract has had been formed. Usually seen in bilateral contracts.

Alliance Bank Ltd v Broom (1864)- consideration can be a promise not to sue

Facts: C had overdraft of £22,000, bank promised not to sue if he showed security, he failed to do so. Bank sued, C said there was no consideration to enforce him showing security, consideration was promise not to sue. Legal principle: Consideration can be a promise not to sue.

Lampleigh v Brathwait (1615)- Past consideration is sufficient when it is provided at the promisor's request and it is understood that payment will be made in return.

Facts: Defendant asked the claimant to get a pardon, promised £100 after received. Although past consideration was implied unspoken consideration of payment (like when in taxi), so past consideration was merely conformation of original spoken one. Legal principle: Past consideration is sufficient when it is provided at the promisor's request and it is understood that payment will be made in return.

Central London Property Trust v High Trees House Ltd (1947)- promissory estoppel

Facts: Flat price agreed to be halved by both parties, as very few occupants during the war. High trees paid reduced rate for five years, but by 1945 went flats began to fill the Central London Property Trust sued for full payment beyond 1945. Lord Denning held rent payable beyond 1945, sated in obiter that if they tried to tried to sue for rent from 1940 on wards, would have been estopped from reneging on the promise on which the defendants had relied on as long as the conditions which led to that promise continued.

Collins v Godefroy (1831)- Carrying out an existing public duty will not amount to consideration

Facts: Policemen was promised to be paid by defendant to give evidence. Promise to pay was unenforceable since there was no consideration given by officer, it was already his public duty to attend court. Legal principle: Carrying out an existing public duty will not amount to consideration.

Stilk v Myrick (1809)- Performance of a contractual duty owed to a promisor is not usually consideration.

Facts: Two sailors deserted ship during voyage, captain promised remaining crew members a share of their wages. At the end of voyage the captain refused to pay. When sailors sued they failed as only performed their contractual duties so no consideration was given to the captains promise of extra wages. Legal principle: Performance of an existing contractual duty owed to a promisor is not normally consideration.

Thomas v Thomas (1842)- consideration must be sufficient but need not be adequate

Facts: Widow had to pay £1 a year and keep house in good repair to remain in it. The defendant tried to evict saying not adequate consideration, but court rejected saying £1 and repairs was sufficient, consideration need not be adequate. Legal principle: Consideration must be sufficient, but need not be adequate.

Tweddle v Atkinson (1861)- consideration must move from the promisee

Facts: Father (C) unsuccessful, as although named on agreement gave no consideration to agreement between the son and the defendant. Legal principle: Consideration must move from the promisee

White v Bluett (1853)- consideration must be of economic value

Facts: Father promised to let son off with repayments if he promised to stop complaining. Court said promise was not enforceable as complaints had no economic value. Legal principle: Consideration must be of economic value.

Roscorla v Thomas (1842)- Consideration must be given in return for the promise of the other party.

Facts: The defendant sold the claimant a horse and said after sale that the horse was free from any vices. Although this was not true, the promise was not enforceable, because made after sale so was not given as consideration in return for promise. Legal principle: Consideration must be given in return for the promise of the other party.

What is consideration?

In English law, an agreement isn't binding unless it is supported by what is called consideration. Put simply, this means that each party must give something in return for what is gained from the other party, so if you wish to enforce someone's promise to you, you must prove that you gave something in return for that promise. English law does not support gratuitous promises (ones done without charge, payment or any value given in return). Consideration may be a thing, service or a promise.

Consideration need not benefit the promisor

Jones v Padavatton (mothers consideration to provide house)

Pinnel's case- part-payment of debt enforceable promise where extra benefit form consideration.

Legal principle: If a debtor offers to pay a reduced sum back to the lender in full and final settlement and the lender agrees to accept it, this agreement will only be binding if the debtor provides some extra element that can be treated as consideration.

Williams v Roffey (1991)- Contractual duty, extra benefit= consideration

Legal principle: If one party's promise to perform an existing contractual duty to supply goods or services confers an additional practical benefit on the other party, then, providing no duress is involved, it will be sufficient consideration to make a promise binding.

Definition of consideration in common law- Dunlop v Selfridge (1915)

Legal principle: Lord Dunedin approved Pollock's definition of consideration; an act of forbearance 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.

Scotson v Pegg- performance of contractual duty to third party can amount to consideration.

Legal principle: if a contracting party promises to provide a benefit to a third party which they are already bound to provide under contract, this promise can still be good consideration for a promise made by a third party.

Waiver doctrine

Parties should be prevented from going back on promise to waiver certain rights, e.g. accepting delivery later than agreed. Subject to the usual principle of equity, that promise can be held binding, even without consideration.

Define detriment in law-

To incur detriment means to cement a promise by either refraining from doing something that one has a legal right to do or by doing something that one is not under any legal obligation to do.

Define forbearance-

Voluntarily refraining from doing something, such as asserting a legal right. For example, a creditor may forbear on its right to collect a debt by temporarily postponing or reducing the borrower's payments.