Contract law seminar 9 1. Consideration is the idea that an exchange or bargain is the essence of the contract, and that each party pays a 'price' for whatever is obtained from the other party e.g. buying a chocolate bar for £1 2. Consideration need not be adequate but must be sufficient (Chappell v Nestle) Past consideration is no consideration (Re McArdle) -> exceptions: - Act must have been performed at the request of the promisor (Lampleigh v Braithwait) - Expectation of payment or conferment of some other benefit (Re Casey's Patents) - The promise or payment must have been legally enforceable had it been given in advance Consideration must move from the promise (Tweedle v Atkinson) 3. Executed - Where the promise has been performed, the contract (or the consideration) is said to be 'executed'. - Executory - Where the promise is yet to be performed, the contract (or the consideration) is said to be 'executory'. 4. Past consideration - promise performed before the contract Past consideration can be valid (Pao On) 5. Stilk v Myrick - The claimant was a seaman on a voyage from London to the Baltic and back. He was to be paid £5 per month. During the voyage two of the 12 crew deserted. The captain promised the remaining crew members that if they worked the ship undermanned as it was back to London he would divide the wages due to the deserters between them. The claimant agreed. The captain never made the extra payment promised. HELD - The claimant was under an existing duty to work the ship back to London and undertook to submit to all the emergencies that entailed. Therefore he had not provided any consideration for the promise for extra money. Consequently he was entitled to nothing. Williams v Roffey - The defendants were building contractors who entered an agreement with Shepherds Bush Housing Association to refurbish a block of 27 flats. Contract was subject to a liquidated damages clause if they did not complete the contract on time. D's engaged the claimant to do the work for an agreed price of £2fi,fififi. 6 months after commencing the work, the C realised he had priced the job too low and would be unable to complete at the originally agreed price. He approached the defendant who had recognised that the price was particularly low and was concerned about completing the contract on time. The defendant agreed to pay the claimant an additional £575 per flat. The claimant continued work on the flats for a further 6 weeks but only received an additional £5fifi. He then ran out of money and refused to continue unless payment was made. The defendant engaged another carpenter to complete the contract and refused to pay the claimant the further sums promised arguing that the claimant had not provided any consideration
as he was already under an existing contractual duty to complete the work. HELD - Consideration was provided by the claimant conferring a benefit on the