LECTURE 8 - CONTRACT, CONSIDERATION - 12/11/19 What is '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 party. - That price (the exchange element) is consideration. Bargain - I promise to give you my book - this is not a contract because there is no bargain. - I promise to give you my book and you promise to give me £1ti for it- there is a bargain, and this can be a contract. - There is consideration on both sides of the agreement. Common law definitions - '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 or responsibility, given, suffered or undertaken by the other.' o Currie v Misa (1875) · Talks about one party gaining benefit and one party gaining detriment, this isn't always the case; it's usually that benefit and detriment occurs in both parties. Benefit and Detriment - I give you my book o Benefit = £1ti o Detriment = Book - You give me £1ti o Benefit = Book o Detriment £1ti Definitions Contd. - '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.' o Dunlop Pneumatic Tyre Co v Selfridge (1915) " Contractual agreements can be made up of purely promises. Executed and Executory Consideration: - Where the promise has been performed, the contract (or the consideration) is said to be 'execute?.
- Where the promise is yet to be performed, the contract (or the consideration) is said to be 'executory'. - Example Executed: o Alice orders and pays for 1ti bottles of wine from Tim's shop, and Tim promises to deliver them to her in the following week. If Tim does not deliver, this is a breach of contract and Alice can sue. o Alice has performed her side of the bargain by paying- her consideration for Tim's promise to deliver the bottles of wine is 'executed'. - Example Executory: o Alice orders 1ti bottles of wine from Tim's shop and agrees to pay for them upon delivery in the following week. o Tim promises to deliver, and Alice promises to pay upon delivery. o Both parties' consideration is 'executory'. Principles in relation to Consideration - Consideration must be 'Sufficient' though it need not be 'Adequate' - Past consideration is no consideration - Consideration must move from the promisee 1. Consideration must be 'Sufficient' though it need not be 'Adequate' o Something of value in the eye of the law, but it doesn't not have to be of equivalent economic value. " Chappell v Nestle (1960) White v Bluett (1853) Ward v Byham (1956) Hamer v Sidway (1881) · Bainbridge v Firmstone (1838) 2. Past consideration is no consideration - If A