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Consideration- This is the primary (but not exclusive) means through which promises are deemed
enforceable under English Law.
- The easiest way to understand considera;on is ‘the price of the promise’ – what one
each party is ge=ng in return for his promise.
- Either a benefit or a determent must be accrued by each party – it is not necessary
for both to be present.
(If you promised to give money to charity and then negated on that you could not be
sued as you would not have gained anything therefore being no considera>on).
- A common defini;on of considera;on was cited Currie v Misa:
“[S]ome right, interest, profit or benefit accruing to the one party, or some forbearance,
detriment, loss, or responsibility given, suffered or undertaken by the other.”
- The only way around considera;on is via the wriBen document of a deed.
- That is enough to make a promise enforceable without valid considera;on.
Orthodox concep9on of considera9on:
- The orthodox concep;on = exchange or bargain.
- There must be an exchange; a deed for a deed, money for an item.
- GiHs are not legally binding under English Law.
Cri9cism of the orthodox concep9on:
- This orthodox concep;on of considera;on has been cri;cized by common law:
(a) Williams v Roffey [1990] => Introducing concept of “prac;cal benefit”, which eats
away at the exchange model.
(b) Central London Property Trust v High Trees House => Provides a modern
restatement of promissory estoppel.
(c) Walton Stores Ltd v Maher => Provides exten;on of the “orthodox” view of
promissory estoppel.
Considera9on as benefit and determent:
Currie v Misa – Outlined that each party must receive a benefit and a determent.
Dunlop v Selfridge Ltd- Idea that an act of forbearance is the price for which the promise is
bought.
, When is considera9on needed:
- Considera;on is not only required when a contract is formed, but also if the par>es
wish to change or alter the contrac>ng any way.
- Cri;cism of considera;on state that at these two different stages, the doctrine
accomplishes two different things.
- At the start, it is to stop gracious transacLons.
- At the later stage, it focuses more on prevenLng duress.
Rules of considera9on:
There are various rules governing the law of considera;on:
1. The considera9on must be sufficient but need not be adequate.
- There is no requirement that the considera;on must be market value, providing
something of value is given eg £1 given in exchange for a house would be valid.
- The courts are not concerned with whether the par>es have made a good or bad
bargain:
- Chappell & Co v Nestle (1966)
2. The considera9on must move from the promisee.
- In order to be valid, considera;on must “move from the promise”, though need not
necessarily move to the promisor.
- This basically means that there must be considera9on.
(i) Two party exchanges:
De La Bere v Pearson (1908)
(ii) Exchange involving a Third party:
- This is now mostly governed by Contract Act 1999.
- The general rule is that the third party is not legally bound to fulfil the promise.
Tweddle v Atkinson (1861)
- A couple were ge=ng married.
- The father of the bride entered an agreement with the father of the groom that they
would each pay the couple a sum of money.
- The father of the bride died without having paid.
- The father of the son also died so was unable to sue on the agreement.
- The groom made a claim against the executor of the will.
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