What is consideration?
All contracts require that something is given in return for something else.
There should be a benefit to the person receiving something or a detriment to
a person giving it. Both may be present, but the presence of one or the
others is enough.
Dunlop V Selfridge 1915- “the price for which the promise of the other is
bought”
Rules of Consideration:
1. The consideration must be sufficient but need not be adequate:
Consideration must be sufficient but not be adequate. Sufficent must be
real or tangible; having some actual value. Hapell & Co v Nestle Co Ltd
1960; Thomas v Thomas 1842. Forbearance: White v Bluett 1853
2. The consideration must not be past.
3. The consideration must move from the promisee.
4. An existing duty will not amount to valid consideration.
5. Part Payment of a debt is not valid consideration for a promise to forego
the balance: This is where a party offers to pay only part of a debt in
satisfaction of the whole debt.
Types of Consideration:
1. Executory- consideration remains in the future- a promise in return for
promise
2. Executed- consideration already performed but it cannot be past
Cases:
Roscorla v Thomas 1842
RE McArdle 1951: Authority for principle that past consideration is not good
consideration
Lampleigh v Braithwait 1615
All contracts require that something is given in return for something else.
There should be a benefit to the person receiving something or a detriment to
a person giving it. Both may be present, but the presence of one or the
others is enough.
Dunlop V Selfridge 1915- “the price for which the promise of the other is
bought”
Rules of Consideration:
1. The consideration must be sufficient but need not be adequate:
Consideration must be sufficient but not be adequate. Sufficent must be
real or tangible; having some actual value. Hapell & Co v Nestle Co Ltd
1960; Thomas v Thomas 1842. Forbearance: White v Bluett 1853
2. The consideration must not be past.
3. The consideration must move from the promisee.
4. An existing duty will not amount to valid consideration.
5. Part Payment of a debt is not valid consideration for a promise to forego
the balance: This is where a party offers to pay only part of a debt in
satisfaction of the whole debt.
Types of Consideration:
1. Executory- consideration remains in the future- a promise in return for
promise
2. Executed- consideration already performed but it cannot be past
Cases:
Roscorla v Thomas 1842
RE McArdle 1951: Authority for principle that past consideration is not good
consideration
Lampleigh v Braithwait 1615
