Contract Lecture 8 - Consideration English courts have developed other tests to assess the enforceability of agreements. The main test is the requirement for 'consideration'. What is meant by consideration? - The idea of exchange or bargain is the essence of a contract - Each party pays a 'price' for whatever is obtained from the other - That price (the exchange element) is consideration Bargain - EXAMPLE I give you my book - this is not a contract as there is no bargain. I give you my book and you give me £10 - there is a bargain and this can be a contract. There is consideration on both sides of the agreement. Common Law Definitions Currie v Misa 1875 'A valuable consideration, in the sense of the law, may consist either in some right, interest, profit or benefit accruing to one party or some forbearance, detriment, loss of responsibility, given suffered or undertaken by the other'. Dunlop Pneumatic Tyre Co v Selfridge 1915 'An act or forbearance of the one party, or the promise thereof, is the price for which the promise of the other is bought, and the promise thus given for value is enforceable'. Benefit and Detriment I give you my book Benefit = £10 & Detriment = Book You give me £10 Benefit = Book & Detriment = £10 Executed and Executory Consideration: - Where the promise has been performed, the contract (or the consideration) is said to be executed. - Where the promise is yet to be performed, the contract( (or the consideration) is said to be executory. Principle in relation to consideration: - Consideration must be 'sufficient' though it need not be 'adequate'. Chappell v Nestle 19ff0: White v Bluett 1853: Ward v Byham 195ff: Hamer v Sidway 1881: Bainbridge v Firmstone 1838:
The defendant asked the claimant if he could weigh his boiler - if you let me weigh your boilers I promise I won't destroy them - he weighed them and then destroyed them - was weighing the boiler something that would be a benefit to the defendant? Courts will not inquire into what a party chooses to be happy with in reference to the exchange - it only matters to the party - doesn't have to be adequate or of economic value, simple a notion to contract. - Past consideration is no consideration EXAMPLE - Amanda gives Jake a life from Lincoln to Nottingham in her car. When they arrive in Nottingham, Jake promises to give Amanda £10 towards the petrol. Amanda cannot enforce this promise as her consideration, which is giving Jake a lift, is 'past'. Re McArdle 1951: Exceptions: The common law exceptions - restated as three requirements by Lord Scarman in: Pao On v Lau Yiu Long 1980: 1. An act must have been performed at the request of the promisor - Lampleigh v Braithwait 1ff15. fi. Expectation of payment or conferment of some other benefit - Re Casey's Patents 189fi. 3. Actions would still be good consideration