Contract Law - Consideration Cases Mind Map - (Graduate Diploma in Law/ LLB Law)
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Course
Contract Law (GRADUATEDIPLOMAINLAW)
Institution
University Of Central Lancashire
Notes from Contract Law on the Graduate Diploma in Law. Summary of relevant cases related to the topic of 'Consideration'.
Notes from a GDL graduate with Distinction.
Stilk v Myrick (1809) 170 ER 1168 Williams v Roffery Bros. and Central London Property v High Trees Ho. [1941] 1 KB 130
Shadwell v Shadwell [1860] 142 ER 62
Facts: P was a seaman on a voyage from Nicholls (Contractors Ltd). [1990] 2
Facts: D was P’s uncle. D promised to pay his WLR 1153 Facts: HT leased a block of flats from CLP at a ground rent of £2,500. Property
London to the Baltic and back. He was to be
Nephew £150 a year until his income reached suffered from falling occupancy rates due to the WW2 in 1940, so parties agreed
paid £5 per month. During the voyage, 2/12 Facts: Appellants Roffery Bros, were
600 guineas provided he married his fiancé. to reduce rent by half. However, it was not agreed how long this would last for.
crew deserted. Captain promised the builders who were contracted to Defendants continued to pay rent at this new rate. By 1945, war had ended, and
Uncle paid 12 instalments but then died and remaining crew that if they worked the ship refurbish 27 flats belonging to a housing the flats were full occupancy. Plaintiffs sued HT for the full rent from 1945
payments stopped. Nephew sued uncle’s undermanned back to London he would corporation. Contract had a penalty onwards.
estate for remaining payments. divide the ages between them. P agreed. clause for late completion. Appellants
Issue: Marriage contract was consideration, Captain never made the extra payment subcontracted some work to Williams, a Issues: Defendant argued that the agreement to pay full rent at a reduced rate
even though the contract was made with a 3rd promised. applied to the whole term of the lease. They argued the plaintiffs were estopped
carpenter. When Williams fell behind
from claiming that the rent should be higher. Court reviewed Hughes v
party to the agreement, uncle’s promise was Issue: P was under his existing duty to work with work, appellants offered him a
Metropolitan Railway Co (1877) where the H of Ls held that parties should be
an inducement to the Nephew to perform his the ship back to London and undertook to bonus payment to finish on time. prevented from going back on a promise to waive certain rights. Case law showed
contract. Plaintiff had, by getting married, submit to all the emergencies that entailed. Williams carried on working until that a promise which the promisor knew was going to be acted on to whom it was
made a material change in his position and He had not provided any consideration for payments stopped. Sued appellants for made was enforceable despite a lack of consideration. Binding promise in this
had induced his wife to do the same. the promise for extra money. Consequently, breach of contract.
Marriage could benefit to interested relatives, he was entitled to nothing. Collier v P&MJ Wright (Holdings) LTD [2007]EWCA Civ 1329
Issue: C of A held doctrine of Stilk v
so the uncle did derive a benefit from the
Myrick had been refined. promise to Facts: The claimant owed a debt of £46,000 to the defendant.
marriage, therefore marriage was good
make bonus payments to complete Defendant promised that the claimant, and the 2 other property
consideration.
work on time was enforceable if the developers, could each take responsibility for the 1/3 of the dept.
Re Selectmove Ltd [1995] 2 All ER 481 promisor obtained a practical benefit having paid off his 1/3 share, the other 2 developers had declared
Facts: Crown demanded £25,000 in tax from Selectmove Ltd as and the promise was not given under bankruptcy. The defendant attempted to claim the remaining 2/3 from
they had underpaid. Selectmove agreed with a tax collector the duress of by fraud. Appellants own idea the claimant.
payment could occur in £1000 monthly instalments. After Issue: Could the claimant hold the agreement to be binding to prevent
accepting 7 monthly payments, Crown sought a winding up order having to pay the remaining 2/3 share? Yes. The rule of Foakes v Beer
of. Selectmove as they owed £18,000 in tax. [1884] applied, whereby the part payment of a debt is not satisfaction
Issue: Was there consideration in the agreement to pay in for the whole with regards to consideration.
monthly instalments, as Crown obtained a practical benefit in
that they would get paid? No consideration, claim failed. Combe v Combe [1951] 2 KB 215
Although a practical benefit may be found as consideration
where there is a promise of extra money for existing duties, as
per Williams v Roffey [1990] such a benefit cannot be found
Topic 2: Facts: During the divorce, husband promised to pay his wife a tax-free sum
of £100 a year to represent a permanent maintenance payment. He
Consideration
in the case of a part payment of debt suddenly decided to stop paying her. Wife brought an action to enforce the
promise invoking promissory estoppel.
Pinnel’s Case (1602) S Co Rep 117a Issue: Could the husband be estopped from stopping the payments? There
Facts: Defendant, Cole, owed the Plaintiff, Pinnell, the sum of £8 was no pre-existing agreement which was later modified by a promise.
10s. Pinnel sued Cole for recovery of the debt. Cole had, at No estoppel, claim failed. Estoppel can only be used as a shield, not a
Pinnel’s request, paid £5 2s 6d one month before the debt was sword.
due to be paid and stated that they had an agreement that this
part payment would discharge the entire debt
D & C Builders v Rees [1966] 2 QB 617
Issue: D argued that plaintiff had accepted partial payment of the
debt as satisfaction of the whole. However, it is a general rule Facts: D&C had done work for Mr Rees, for which he owed £482.
that payment of a lesser sum than that which was owed in Mrs Rees complained that the work was bad, and said she would
satisfaction of a debt could not discharge the obligation to repay pay £300 only or else they would get nothing. D&C reluctantly
the whole amount. Court confirmed the general rule can’t be accepted £300 to avoid bankruptcy.
satisfaction for the whole. By paying some money early the Issue: Could D&C claim the additional £182? Yes. In Lord Denning’s
NZ Shipping Co v Satterthwaite
defendant had provided the plaintiff with a further benefit and opinion, a part payment can be satisfaction of a debt, however as
(The Eurymeon) [1975] AC 154
had not just repaid the money he already owed. Good the part payment was taken under duress, the £300 agreement
consideration, and court found for defendant. Facts: Contract for the carriage of a
was voidable. Rees was liable for the additional £182.
machine by ship to NZ provided the owners
Pao on v Lau Yiu Long [1980] AC 614 of the goods did not sue the carriers or Hartley v Ponsonby (1857) 7 E&B
stevedores unless any claim was brought 872 Foakes v Beer [1884] 9 App Cas 605
Facts: Plaintiff owed shares of a private company which owned a within one year of the action. Stevedores =
building the defendants wanted to buy. Ds were majority Facts: Half of a ship’s crew deserted on Facts: Dr Foakes owed Mrs Beer £2,000 after she had obtained
independent contractors, engaged to load a voyage. Captain promised the
shareholders in a public company. P agreed to sell shares to D so and unload ship by ship owner. Stevedore
judgement against him in an earlier case. Foakes offered to pay
that D could acquire building. In return P would get shares in the remaining crew members extra money if £500 immediately and the rest by instalments, Mrs Beer agreed
damaged machine whilst unloading it.
public company. P and D made another agreement that P would not they worked the ship and completed the to this and agreed she would not seek enforcement of the
Owner of machine brought action against
sell shares for a while in fear of drop in share value. P realised that D stevedore after the limitation period in the voyage. Captain then refused to pay up. payment provided he kept up the instalments. No mention was
would make profit from agreement and demanded that 2nd contract. Issue: Crew were entitled to the extra made in this agreement of interest although judgement debts
agreement be replaced with one in which P was indemnified for fall Issue: Stevedores had provided payment promised on the grounds that generally incurred interest. Foakes paid all instalments and Mrs
in share value and may also benefit. D agreed in fear of delaying consideration in the form of services of either they had gone beyond their Beer then brought action for interest.
main contract. Share value dropped, P sought to rely on indemnity unloading the machine. Relying on the case contractual duty or that the voyage had Issue: Dr Foakes was liable to pay the interest. The agreement
contract which D refused. of Scotson v Pegg there is nothing to become too dangerous frustrating the reached amounted to part payment of debt and under the rule
prevent consideration owed to a 3rd party original contract and leaving the crew in Pinnel’s case this was not good consideration for a promise
Issue: Court found for P. Doctrine of past consideration applied from
being valid consideration. Stevedores had free to negotiate a new contract. not to enforce the full amount due.
Lampleigh v Braithwaite (1615) an act done before a promise protecition from limitation clause
was good consideration for that promise if it was done at thee
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