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    Contract Law Assignment Y3S2

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    Pua Xuan Ang
    Consideration is a key element in forming a valid contract. Consideration requires that both parties receive either a benefit or detriment. Consideration must be sufficient but does not need to be adequate in value. Courts will enforce a promise if consideration is real and of some value, even if not equivalent on both sides. Several cases demonstrate this rule, such as finding chocolate wrappers or rental payments as sufficient consideration. Exceptions exist for existing duties or debts. Courts consider justice, commercial realities, and public policy in determining consideration.

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    Contract Law Assignment Y3S2

    Uploaded by

    Pua Xuan Ang
    30 views5 pages
    Consideration is a key element in forming a valid contract. Consideration requires that both parties receive either a benefit or detriment. Consideration must be sufficient but does not need to be adequate in value. Courts will enforce a promise if consideration is real and of some value, even if not equivalent on both sides. Several cases demonstrate this rule, such as finding chocolate wrappers or rental payments as sufficient consideration. Exceptions exist for existing duties or debts. Courts consider justice, commercial realities, and public policy in determining consideration.

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    Contract law assignment Y3S2

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    Consideration is a key element in forming a valid contract. Consideration requires that both parties receive either a benefit or detriment. Consideration must be sufficient but does not need to be adequate in value. Courts will enforce a promise if consideration is real and of some value, even if not equivalent on both sides. Several cases demonstrate this rule, such as finding chocolate wrappers or rental payments as sufficient consideration. Exceptions exist for existing duties or debts. Courts consider justice, commercial realities, and public policy in determining consideration.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    30 views5 pages

    Contract Law Assignment Y3S2

    Uploaded by

    Pua Xuan Ang
    Consideration is a key element in forming a valid contract. Consideration requires that both parties receive either a benefit or detriment. Consideration must be sufficient but does not need to be adequate in value. Courts will enforce a promise if consideration is real and of some value, even if not equivalent on both sides. Several cases demonstrate this rule, such as finding chocolate wrappers or rental payments as sufficient consideration. Exceptions exist for existing duties or debts. Courts consider justice, commercial realities, and public policy in determining consideration.

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    © All Rights Reserved
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    of 5

    Consideration is a significant element in a contract.

    In the case of Currie v


    Misa, consideration is defined as either in some power, or benefit ensuing to the one
    party, or some tolerance, damage, harm or responsibility accorded, sustained or
    undergone by the other. Moreover, in the case of Dunlop v Selfridge, consideration is
    referred to as price of a promise where one party is required to “pay” for promise of
    other party which is not necessarily in monetary form in order to make the promise
    legally binding and becomes a valid contract.1
    There is an important rule in consideration which is consideration must be
    sufficient but need not be adequate. Sufficient in this rule means that if the
    consideration fulfills the legal requirement that a bargained-for give in return exists,
    then a consideration is sufficient. Since the consideration is a price, it must be real and
    have some value. Adequacy in this rule can be defined as the equivalency of the
    exchange which means whether both party can get something in return that is
    equivalent to what they promise to give.2 Therefore, this rule means that something
    that is real and have value must be given in return for a promise but it is not required
    to have adequate and equal value.
    There are some cases well illustrated how this rule applied in the court. The
    first case is Thomas v Thomas.3 In this case, Justice Patteson held that consideration
    is required to be something that have value in the eyes of the law. Besides that, the
    court will not concern whether £1 rental was adequate for the commercial rent for the
    house or not, but will concern about the price paid by the claimant which is £1 rental
    per year and keeping the house in good condition which can be considered as
    sufficient consideration.
    The second case is Chappel v Nestle.4 In this case, the chocolate wrappers
    alone do not have monetary value but still considered as sufficient consideration by
    the court as Nestlé get benefit from the chocolate wrappers such as the increase of
    sales and profit even though the chocolate wrappers may have inadequate value.
    The next case is White v Bluett.5 In this case, the court held that promise not
    to complain do not have economic value as the son has no right to complain and
    therefore cannot considered as sufficient consideration.
    1
    Fry, J., Wilshire, T., & Wortley, R., Cambridge International AS and A Level Law Second Edition
    (2nd edn, HODDER EDUCATION 2021)
    2
    Burnham Scott J, and Kraynak J, Contract Law For Dummies (John Wiley & Sons 2012)
    3
    (1842) 2 QB 851
    4
    [1960] AC 87
    5
    (1853) 23 LJ EX 36
    There is also a case which is Bainbridge v Firmstone.6 Where in this case, the
    consideration is non-monetary, the court decides whether the consideration in the eyes
    of law have any value and does it considered a sufficient consideration. Moreover, the
    court tends to allow the parties to decide whether it is or is not having value. In this
    case, the consideration on a party was the benefit of being able to weigh the boilers
    and the other party was being able to get back the boilers in good condition.
    Besides that, there are some different circumstances where the courts will
    determine whether or not applying this rule to the cases. The first circumstance is
    performance of public duty. In the case of Collins v Godefrey, the plaintiff was
    already having a duty to give evidence under the law. Thus, the promise to pay the
    plaintiff to perform his duty that is imposed by law cannot amount to consideration.7
    However, in the case of Glassbrook Brothers v Glamorgan CC, the claimant perform
    exceeded existing duty that they are legally required to do. Therefore, in this case, the
    court held that this will amount to valid consideration and the plaintiff had provided
    the consideration for the promise to pay.8
    The second circumstance is duty owed to third party. In the case of Shadwell v
    Shadwell,9 it was found that an performance of an existing contractual duty that owed
    to a third party can constitute sufficient consideration which is an exception to the rule
    that existing duty cannot constitute sufficient consideration. As in this case, the
    promise of the uncle was an inducement to the marriage and the marriage can be
    considered as detriment to the plaintiff due to the expenses required in marriage.
    Moreover, uncle did obtain benefit from the marriage as it was an object of interest to
    him. Thus, it is a valid consideration.10 In the case of Pao On v Lau Yiu Long, the
    Privy Council decided that the promise to perform a contractual duty that is owed to a
    third party can also be considered as sufficient consideration. This is because the
    promisee gain the benefit from the direct responsibility.11
    The third circumstance is performance of existing contractual duty. In the case
    of Stilk v Myrick, it was found that if the parties are performing the existing
    contractual duty bound by the contract, it cannot constitute sufficient consideration to

    6
    (1838) A & E 743
    7
    (1831) 1B. & AD.950
    8
    [1925] AC 270
    9
    (1860) 9 CB NS 159
    10
    McKendrick E, Contract Law: Text, Cases, And Materials (5th edn, Oxford University Press 2012)
    11
    [1980] AC 614
    a new or separate contract.12 However, there is an exception to this rule which is well
    illustrated in the case of Hartley v Ponsonby.13 In this case, it was found that if the
    party performed over and above the existing contractual duty, it can amount to
    sufficient consideration in a new or separate contract.
    In the case of Williams v Roffey, unlike the case of Stilk v Myrick where
    performing existing contractual duty cannot constitute sufficient consideration, where
    in Williams case, the court held that if there is a practical benefit to other party exists,
    then the performance of existing contractual duty is able to constitute valid
    consideration. In this case, the practical benefit derived by the defendant was avoiding
    the penalty.14
    The last circumstance is part payment of a debt. A general rule was laid down
    in Pinnel's case which is payment of a lower amount of the debt cannot remove the
    responsibility of the debtor to pay the full amount of debt.15 This is rule is well applied
    in the case of Foakes v Beer.16 Therefore, it is very clear that part payment of a debt
    cannot constitute good consideration for a promise to waive the remaining debt.
    There are some aspects that will be concerned by the courts when applying
    this rule to the cases. The first aspect is the need to achieve justice in individual cases.
    This is shown in the case of Ward v Byham.17 In this case, the court shown
    willingness to find proof to constitute a sufficient consideration. The court held that
    the claimant did perform over and above her legal duty in making sure the child was
    “well” taking care of and making the child “happy”. Besides that, Lord Denning held
    that as long as the other party derived benefits from the act, it should be considered as
    valid consideration.18
    The second aspect is to reflect commercial reality. This is shown in the case of
    Williams v Roffey Bros v Nicholls Contractors. In this case, the court thinks that if a
    commercially sensible renegotiation of an existing contract is able to give benefits to
    both parties, the court will allow and encourage it. However, it is important to make
    sure that the new promise has to be made without fraud or duress in order for the
    practical benefit to constitute valid consideration.19
    12
    (1809) 170 ER 1168
    13
    [1857] 26 LJ QB 322
    14
    [1991] 1 QB 1
    15
    [1602] 5 Co. Rep. 117a
    16
    [1884] UKHL 1
    17
    [1956] 1 WLR 496
    18
    Routledge-Cavendish., Contract Lawcards (4th edn, Cavendish Publishing Ltd 2004)
    19
    ibid
    The third aspect is public policy considerations. This is shown in the case of
    Re Selectmove where the case of Williams v Roffey Bros is unable to apply in this
    case. This is because Williams case is applied when providing goods or service to
    another but not an obligation to pay money. Besides that, the creditor will
    undoubtedly always having a practical benefit to himself if the creditor make an
    agreement with debtor to pay the debt by installments. Therefore, the court in this
    case was bound by the case of Foakes v Beer.20 There is also a case which is
    Glassbrook Brothers v Glamorgan CC that the main concern in this case by the court
    is to make sure that anyone that performing existing legal duty was not entitled to
    receive extra rewards.
    The next aspect is respect the freedom of the parties to make their own bargain
    and decide what consideration they want. This can be proved in the case of Chappell v
    Nestle where Lord Somervell in this case once stated that a contracting party can set
    down what consideration he picks.21
    The last aspect is the desirability of flexibility in consideration which is the
    opinion of Professor Atiyah and the benefit or detriment analysis of consideration
    held by Professor Treitel. Professor Atiyah held that if the court found a good and
    sufficient reason to enforce the promise, the court is able to enforce. On the other
    hand, Professor Treitel held that benefit or detriment is usually a good reason to
    enforce a promise. However, Professor Atiyah argued that benefit or detriment does
    not always can be a sufficient reason to enforce a promise or there may be no other
    good reasons to enforce a promise. Besides that, Professor Treitel argued that the
    view of consideration by Professor Atiyah that refers to a reason for the enforcement
    of a promise was a denial to the presence of any applicable rules of law as it does not
    clearly stated the different conditions for the courts to find the presence of a good
    reason.22
    (1536 words)

    Bibliography
    Books

    20
    ibid
    21
    ibid
    22
    McKendrick, E., Contract law. (14th ed., Bloomsbury Publishing PLC., 2019)
    Burnham Scott J, and Kraynak J, Contract Law For Dummies (John Wiley & Sons
    2012)
    Fry, J., Wilshire, T., & Wortley, R., Cambridge International AS and A Level Law
    Second Edition (2nd edn, HODDER EDUCATION 2021)
    McKendrick, E., Contract law. (14th ed., Bloomsbury Publishing PLC., 2019)
    McKendrick E, Contract Law: Text, Cases, And Materials (5th edn, Oxford
    University Press 2012)
    Routledge-Cavendish., Contract Lawcards (4th edn, Cavendish Publishing Ltd 2004)

    Cases
    Thomas v Thomas(1842) 2 QB 851
    Chappel v Nestle[1960] AC 87
    White v Bluett(1853) 23 LJ EX 36
    Bainbridge v Firmstone(1838) A & E 743
    Collins v Godefrey(1831) 1B. & AD.950
    Glassbrook Brothers v Glamorgan CC[1925] AC 270
    Shadwell v Shadwell(1860) 9 CB NS 159
    Pao On v Lau Yiu Long[1980] AC 614
    Stilk v Myrick(1809) 170 ER 1168
    Hartley v Ponsonby[1857] 26 LJ QB 322
    Williams v Roffey Bros v Nicholls Contractors[1991] 1 QB 1
    Pinnel's case[1602] 5 Co. Rep. 117a
    Foakes v Beer[1884] UKHL 1
    Ward v Byham[1956] 1 WLR 496

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