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Consideration Essay Plan
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Consideration Essay PlansDEBATE 1: Should “intention to create legal relations” take over as the hallmark of enforceability?
Theorists who subscribe to ‘will’ theory of contract only require that it should be seriously intended to be legally binding
It’s been argued that consideration has been entirely redundant by the adoption of a separate need for proof of serious
intention
Simpson
Having offer & acceptance, consideration, estoppel and ‘intention to create legal relations’ seems like ‘too many doctrines
chasing a limited number of problems
He recommends discarding ‘old’ doctrines (consideration?) when importing new ones (intention to create LR?)
2 objections to this
Consideration is not merely evidence of intention. It excludes gratuitous promises from legal enforcement & plays role in
making sure ‘past consideration’ = not enforceable. SO it is unsafe to assume that consideration is the equivalent of the intent
to create LR doctrine
Intent doctrine is not what is seems; it has little to do with intention and is instead used to draw boundaries of contractual
obligation
Steve Hedley makes the same case
Except for when parties have made it explicitly clear, there is very little evidence of actual intention. For commercial parties and
in domestic situations, litigation is the last thing on people’s minds when making an agreement (this is because few
relationships survive a court case)
Courts trying to uncover intention are “driven to impose their own view of whether the agreement ought to be enforced”
This point drove judgement in Balfour v Balfour; the courts wanted to control the invocation of contract law in domestic
litigation and domestic cases. The idea of ‘intention’ could be used to stop contract invading domestic cases.
This was the reason ‘intent’ was used – there wasn’t a sudden conversion in academic view that all contracts required an
intention to create legal relations
Consideration couldn’t be used in Balfour or in domestic cases. For e.g. where one person says to another “I will meet you at
7:30; you bring the food; I will bring the drink” it technically counts as consideration, but neither party envisages any litigation
occurring if the food or drink isn’t brought
- NB: this is a weak point in Chen-Wishart’s defence of consideration as keeping contract law out of the private sphere;
whilst is serves to exclude gift promises from legal enforceability, consideration is inherent in a lot of family and domestic
arrangements
Business contracts are nearly always enforceable. But – parties not ‘a arms length’ do not always enter into legally enforceable
commitments except where one party has performed.
Are there reasons to keep contract out of the domestic sphere?
Atiyah; yes. The market has no place in social relations
Freeman; no. The boundaries of the ‘private’ in family life have shifted so that the presumption against contractual obligation
should be removed. This would allow greater autonomy
But F = highly controversial opinion. Baranoess Hale – giving such effect to freedom of contract disadvantages the economicaly
weaker spouse.
Bottom line: there are good reasons to stop the law of contract intruding into private affairs, but to get rid of consideration and base test
off of ‘intention to create legal relations’ is not good enough.
McBride
In a case where A makes a promise to B, we might want to find that the promise = legally binding because of
1. Something B has done or
2. Something A has done
We need the law to specify when a promise will be legally binding because of something the promisee has done – this is the function of
consideration today. If we got rid of consideration, we would just need to reinvent it.
Should we recognise that a promise not made in a deed is legally binding even though the promisee has done nothing to give us a reason
to want to enforce the promise?
Pillans v Van Mierop: Mansfield took the view that we should enforce any promise that is intended to be legally binding. The
notion of consideration was for the sake of evidence only; when it is refused in writing e.g. covenants, deeds etc, there is no
need for consideration
Fried puts forward 2 arguments in favour of this view:
1. Moral theory: contract law exists to give effect to the moral obligation that a promise-maker comes under to keep his
promise. So we only need intent – if someone intends to be legally bound by a commitment, they are morally bound by it
2. Transfer theory. Contract law is a natural extension of the liberal premise that individuals have rights. It allows us to
dispose of these rights on terms that seem best to us. So – if someone intends to be bound by promise to paint house, he
is trying to transfer his right to decide whether or not to paint someone’s house.
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