NAME: MWANAISHA HASSAN

RE :123-053011-29915
COURSE WORK: LAW OF CONTRACT
STREAM: A
TOPIC: CONSIDERATION AND CONTRACTUAL INTENTION

QN 1.
Nakiwala expressed a desire that Namatovu shall be entitled to
1000 Ugandan shillings per year If she gave her the one-acre of
land located in Mityana. Namatovu gave her the land as agreed.
Nakiwala later declined to pay as agreed. Advise the parties.
BRIEF FACTS
Nakiwala expressed a desire that Namatovu shall be entitled
to 1000 Ugandan shillings per year if she gave her one acre of
the land.
Namatovu gave her the land.
Nakiwala did not pay the money she promised.
ISSUES
Whether or not there was consideration.
LAW APPLICABLE
Section 2 of the contract Act 2010
RESOLUTION
In case law of Curie Vs Musacourt held that consideration must
have some right, interest, profit or benefit accruing to one party
or some forbearance,
detriment,
loss
or responsibility
given, suffered or undertaken by the other. Hence according to
the facts in this case of Namatovu it proves that there was
consideration because Namatovu
gave her the land and Namatovu promised to pay 1000 shillings
of which she failed to pay. I therefore advice Namatovu to sue
Nakiwala in the courts of law because she will succeed since
there was consideration.
 QN
Musa sold a laptop to Rajab. Musa after the sale made a
promise to Rajab that the laptop was Free from any computer
viruses. Rajab later found out that the laptop had computer
viruses. Advise the parties.
BRIEF FACTS
Musa sold the laptop to Rajab.
 Musa after the sale made a promise to Rajab that the laptop
was Free from any viruses.
Rajab later found out that the laptop had computer viruses.
ISSUES
Whether or not there was past consideration
LAW APPLICABLE
Section 2 of contract Act 2010
RESOLUTION
In case law of Rosccorla Vs Thomas the plaintiff had
negotiated a horse from the defendant for a certain price.
Subsequently to the agreement the defendant assured the
plaintiff that the horse was sound and free from vice In fact
the horse was vicious and the plaintiff sued for breach of the
promise. It was held that his action would fail since the
defendants assurance was only supported by past
considerations therefore advise Rajab not to file a case or
sue Musa since the promise is based on past consideration
and therefore he will not succeed in the courts of law in case
he sues Musa.
NO. 3 Explain with decide case the exceptions to the rule that
consideration must not be past.
Consideration is defined in the case of Currie vs. Misa as a right,
interest, profit or benefit accruing to one party or forbearance,
detriment, loss of responsibility given, suffered or untaken by
the other party. The general rule of consideration is that past
consideration is no consideration. This was demonstrated in the
case of Roscola vs Thomas, where the plaintiff had negotiated
the purchase of a horse from the defendant for a certain price,
subsequent to the agreement, the defendant assured the
plaintiff that the horse was sound and free from vice, in fact the
horse proved to be vicious and the plaintiff sued for breach of
promise. It was held that his action would fail since the
defendant’s assurance was only supported by past
consideration.
Like most general rules, there exceptions to past consideration
rule. One of them is request by the beneficiary. When a service
is performed at the request of the beneficiary, who then
subsequently promises to compensate the person responsible,
the promise, though supported by past consideration is
enforceable. Consider the case of Lampeigh vs Brathwait. The
defendant killed someone and asked the plaintiff to secure a
pardon from the king. The plaintiff invested a lot of effort and
expenses and later got the pardon for the plaintiff who
promised to pay him 100pounds for his troubles but he failed to
pay. It was held that although Lampleigh’s consideration was in
the past, there was an implied promise by the defendant that
he would reward the plaintiff for his efforts so it was treated as
an agreement and that both the parties actually assumed
throughout their negotiations that the services were to be paid
for.
 Business situations. If something is done in a business
context and it is clearly understood by both sides that it will be
paid for, then past consideration is valid. This is elaborated in
Re Casey’s Patents. A and B wrote to C informing him that they
were going to give him one third of the profits that had been
earned from an invention that C was largely responsible. A and
B refused to pay C and he sued. It was held that C could rely on
the agreement even though C’s consideration was in the past, it
had been done in a business situation at the request of A and B
and it was understood by both sides that C would be paid and
the subsequent promise to pay merely fixed the amount.
Negotiable instruments (bill of exchange). A bill of
exchange is defined as an unconditional order in writing,
addressed by one person to another, signed by the person
giving it. Section 27(1) of the Bill of Exchange Act provides that
an antecedent debt, which would normally be regarded as past
consideration will be good consideration for a bill of exchange.
An example is a cheque.
4.
Brief facts
Malik bought computer from Hani Limited. The computer were
manufactured and sold by Hani limited under the agreement
that required Malik not to sell below the purchase price. Hani
Limited gave an undertaking of giving discount on the price to
Malik. Malik acted to the contrary.
Issue
Whether Hami Limited can sue Malik for breach of contract.
Resolution
Whether Hami Limited can sue Malik for breach of contract.
Consideration is defined in the case of Currie vs Misa as a right,
interest, profit or benefit accruing to one party or forbearance,
detriment, loss of responsibility given, suffered or untaken by
the other party. One of the rules for consideration is the privity
doctrine that means that consideration must move from the
promise. This is demonstrated in the case of Dunlop Pneumatic
Tyre Co. Ltd Vs Selfridge. Dunlop sold tires to Dew and Co
where the contract contained a term that the tyres were not to
be solved below a certain price. Dew & co agreed to demand a
similar undertaking from trade customers who bought the tyres
from them. Selfridge bought the types from Dew & Co but
underpriced the tyres. Dunlop sued. It was held that Dew & Co
could sue Selfridge but not Dunlop who were not party to the
particular contract so it was dismissed, that only a person who
is a party to the contract can sue on it.
According to the above facts at hand, Hami Limited can sue
Malik for breach of contract because Malik was required not to
sell below the purchase price but he acted on the contrary.
5. What is the position of the law on the following:
a) Does a promise to pay a lesser amount owed amount to
sufficient consideration
No, payment of a lesser sum of money owed doesn’t amount to
sufficient consideration. This can be seen in Pinnel’s case.
Pinnel sued Cole for 8pounds 10shilings due on 11th November
1600. In Cole’s defense, he stated that the plaintiff Pinnel
requested that he paid him 5pounds 2shillings and 6pence on 1
October 1600 and that Pinnel had accepted this payment in full
satisfaction of the original debt. It was held that part-payment
in itself was no consideration , However , it was held that the
agreement to accept part payment would be binding if the
debtor , at the creditor’s request provided some fresh
consideration in situations like; part payment on an earlier date
than the due date, a chattel instead of money , part payment in
a different place.
b) Does performance of an existing contractual duty amount
to consideration
No, the performance of an existing contractual duty doesn’t
amount to consideration. In the case of Stilk vs Myrick, the
plaintiff entered into a contract to sail a ship from London to
the Baltic and back. During the voyage, two members of the
crew abandoned work and the captain promised to divide the
wages due to these men between the rest of the crew since he
had been unable to find replacements. On returning to London,
the captain refused to pay the extra wages. He argued that the
plaintiff had done no more than that which he was
contractually obliged to do and thus had not provided sufficient
consideration for the extra wages. The court agreed with the
defendant since the two men had done nothing more that they
had originally agreed to do. However in Hartley vs Ponsonby,
having the same facts, court held that since many crew had
deserted the ship and it had become dangerous to proceed.
Given that the remaining were willing to undertake the extra
hazard, they were entitled to the extra pay promised, so the
plaintiff’s claim would succeed.
c) Does a promise to performance existing contractual duty
to a third party amount to consideration
Yes, a promise to perform an existing contractual duty to a
third party is sufficient consideration provided the promise
benefits one and the other suffers a detriment. If a party
promises one to do something for a second party, but is already
bound by a contract to do this for a third party it is good
consideration. Case of Scotson vs Pegg. Scotson contracted to
deliver coal to X or to X’s order. X sold to Pegg and ordered
Scotson to deliver the coal to Pegg. Then Pegg promised
Scotson that he would unload it at a fixed rate. In an action to
enforce Pegg’s promise, Pegg argued that the promised was
not binding because Scotson had not provided consideration as
Scotson was bound by his contract with X ( a third party) to
deliver the coal. It was held that Scotson’s delivery of coal was a
benefit to Pegg and was valid consideration.
d) Does a promise to perform an existing public duty
amount to consideration
No, the performance of an existing public duty doesn’t amount
to consideration. In Collins vs Godfrey, the plaintiff gave
evidence at a civil trial and the defendant promised to pay him
a fee of six guineas. It was held that the plaintiff could not
recover the promised money since he had provided no
consideration for the promise. Court held that since he was
legally obliged to attend and give evidence at the trial, his
consideration was insufficient to support the defendant’s
promise.
e) Does a promise by a third party to pay a lesser amount
constitute consideration
A promise to accept a smaller sum in full satisfaction will be
binding on a creditor where the part payment is made by a
third party on condition that the debtor is released from the
obligation to pay full amount. The case of Hiranchard
Punumchard vs Temple, a father paid a smaller sum to a money
lender to pay his son’s debts which the money lender accepted
in full settlement. Later the money lender sued for the balance.
It was held that the part payment was valid consideration and
that to allow the moneylender’s claim would be a fraud on the
father.

QN6
Use case law to explain the principles highlighted in the
following cases;
 (a) Combe vs Combe [1951]ALLE.R767
(b) High trees case [1947]K.B.130
(c) Brooker vs Palmer [1942]2ALLE.R674
(d) Weeks vs Tybalds (1605)Noy11
briefexplanationsoftheprincipleshighlightedinthesecases,
(a) CombevsCombe[1951]ALLE.R767,
 This case established the principle that a promise to
perform a moral obligation without legal consideration is
generally not enforceable as a contract. In this case, the
husband made a promise to provide financial support to
his ex-wife, which he later reneged-on. The court held that
there was no valid contract because there was no legal
consideration for the promise, and it was merely based on
moral or domestic considerations.
(b) High Trees Case [1947]K.B.130,
 The High Trees case illustrates the doctrine of promissory
estoppel. It held that if a party makes a clear promise to
another party, and that promise is relied upon, to the
detriment of the party to whom the promise was made,
the promisor cannot later go back on their promise, even if
there was no formal contract. This case established the
principle that a promise, if-acted upon to the detriment of
the promisee, can been forced despite the absence of
consideration.

(c) Brooker vs Palmer [1942]2ALLE.R674,

  This case emphasizes the requirement of certainty in
contracts. It ruled that for a contract to be enforceable, its
terms and obligations must be clear and certain. In this
case, I the court found that the terms of the agreement
were too vague and uncertain to create a binding contract.
(d) Weeks vs Tybalds( 1605)Noy11,
 This is an old case that highlights the importance of
mutuality in contracts. I It established that a contract must
be mutually binding on both parties. If only one party is
bound by the terms of the agreement, and it cannot be
considered a valid contract. I In this case, the court held
that a promise made by one party that was not accepted
by the other party did not create acontract.
7 QN
What is the position of be law in the Following
a) Honour clauses
 Refers to expressed statement in a contract that an
agreement is intended to be binding in honor only
Law applicable
Contract Act 2010
Case law
Incase of Jones vs Vernon’s pools ltd, the plaintiff attempted
to claim money which he alleged had won in football pool.
Each coupon Other contained words ”binding in honor only”
the court held that the words were sufficient to rebut the
presumption and the plaintiff’s action would fail In relation
the above case, the position of law regarding honor clauses
binding in honor only.
b) Agreement subject to contract,
 In the case of Richard vs Harvey agreement subject to a
contract neither party intends to be bound until the formal
contract is made or each part reserves the right to
withdraw until search times as a binding contract is made
Law applicable
Contract Act 2010
Case law
In case of Richard vs Harvey the claimant brought an action
for damages alleging that he had entered into a contract with
the defendant then the existence of that contract was denied
and the judge had to consider emails that passed between
the parties, the court held there was no contract
In relation to the above case the position of the law regarding
an agreement subject to contract is no contract until a formal
contract is made by the parties
C)Ex Gratia compromise,
 Ex Gratia is an amount of money that you would receive by
your employer as a termination payment when you have
left your employment
Law applicable
Contract Act 2010
Case law
In case of Edward vs Skyways Ltd where the plaintiff was
employed as an Airline pilot. The defendant who was his
employer informed they were terminating his service on
ground of redundancy and gave three month notice. in this it
was held that the defendant had to discharge the heavy
burden of rebutting the presumption that there was an
intention to create legal relationship and where liable to
make the payment
In relation to above case the ExGratia compromise doesn’t
mean a negative agreement but simply means that the
employer did not admit to any pre-existing liability on their
part
c) Social and domestic arrangement,
 In these arrangement court presume there is no intention
to create legal relations
In the case of Balfour vs Balfour where the man was civil
servant based in SriLanka took his wife to England for medical
reasons and he agreed to pay her 30 pounds per month
when he failed, and the wife sued him and the court held
that her actions would fail because the parties had no
Intentions to create a legally binding agreement
Basing to the above case the position of the law regarding
social and domestic arrangement, court presume where
 there is a woman and man there Is to intention to create
legal agreement
(e)Agreement which give discretion,
 A discretionary promise maybe too vague to constitute
consideration of the other party’s promise and therefore
un enforceable. In the case of Taylor vs brewer, the plaintiff
agreed to work for a committee who resolved that he
should receive such remuneration as deemed right. The
plaintiff’s claim for reasonable remuneration for work
done failed. It was said that the promise to pay was merely
an engagement in honor
(f)Collective agreements,
 Is an agreement between an employer and trade unions or
associations of employers, agreements rates of wages and
condition of work are usually reached after Collective
bargaining. The terms are incorporated in individual
services contracts and thus become legally binding on the
parties to those contracts. The general rule at common law
views that Collective agreements between trade unions
and employers are not intended to be legally binding. In
Britain the Trade union and Labour Relation Act of 1974
goes to provide the collective agreement by parties are not
intended to be legally enforceable contract unless its in
writing and expressly provides the contrary.