Consideration
Offer and acceptance alone is not enough, there has to be something that's exchanged
between the parties. Eg: employment - labour for money. That is the consideration.
Olden days - promise was enough, not practical. Modern doctrine of consideration.
Traditionally consideration has been defined as some form of benefit or detriment. Benefit -
getting paid, detriment - giving up your time.
What is consideration?
Consideration can be anything of value, which both parties (promisor and promisee) must
agree to exchange to have a legally enforceable contract.
Currie v Misa
A valuable consideration in the sense of the law, may consist either in some right, interest,
profit, or benefit accruing to the one party, or some forbearance, detriment, loss, or
responsibility, given, suffered or undertaken by the other. Lush J
Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd - Arguably a better definition is ‘the
price paid for a promise’. Potentially, a promise of something in the future, executory and
executed consideration.
This case confirmed that a promise to act can itself be good consideration.
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 is thus given for value is enforceable. Lord
Dunedin
Executory Consideration is an exchange of promises. (If you deliver the building materials on
Tuesday then I will pay you for them over the coming months.)
Executed Consideration is a promise made in return for the performance of an act. (If you
find my lost dog, I will pay you £20.)
A promise to transfer is sufficient.
Rules of consideration:
Sufficiency of consideration
Consideration must be sufficient - consideration need not be adequate but must be
sufficient. It must have some economic value (may be negligible). Provided that something is
given in return for the promise, it is irrelevant that it may not equate in value.
Thomas v Thomas - Consideration must be sufficient but need not be adequate.
Consideration must be something which is of some value in the eyes of the law. Rent to be
paid on a piece of land, only £1 a year, not a lot, but they were friends, letting them off, after
a few years, tried to claim it back, but they couldn’t.
Court’s won’t protect you from a BAD BARGAIN. Leave it to the parties themselves to
determine worth.
White v Bluett
A promise was held to have no economic value.
Offer and acceptance alone is not enough, there has to be something that's exchanged
between the parties. Eg: employment - labour for money. That is the consideration.
Olden days - promise was enough, not practical. Modern doctrine of consideration.
Traditionally consideration has been defined as some form of benefit or detriment. Benefit -
getting paid, detriment - giving up your time.
What is consideration?
Consideration can be anything of value, which both parties (promisor and promisee) must
agree to exchange to have a legally enforceable contract.
Currie v Misa
A valuable consideration in the sense of the law, may consist either in some right, interest,
profit, or benefit accruing to the one party, or some forbearance, detriment, loss, or
responsibility, given, suffered or undertaken by the other. Lush J
Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd - Arguably a better definition is ‘the
price paid for a promise’. Potentially, a promise of something in the future, executory and
executed consideration.
This case confirmed that a promise to act can itself be good consideration.
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 is thus given for value is enforceable. Lord
Dunedin
Executory Consideration is an exchange of promises. (If you deliver the building materials on
Tuesday then I will pay you for them over the coming months.)
Executed Consideration is a promise made in return for the performance of an act. (If you
find my lost dog, I will pay you £20.)
A promise to transfer is sufficient.
Rules of consideration:
Sufficiency of consideration
Consideration must be sufficient - consideration need not be adequate but must be
sufficient. It must have some economic value (may be negligible). Provided that something is
given in return for the promise, it is irrelevant that it may not equate in value.
Thomas v Thomas - Consideration must be sufficient but need not be adequate.
Consideration must be something which is of some value in the eyes of the law. Rent to be
paid on a piece of land, only £1 a year, not a lot, but they were friends, letting them off, after
a few years, tried to claim it back, but they couldn’t.
Court’s won’t protect you from a BAD BARGAIN. Leave it to the parties themselves to
determine worth.
White v Bluett
A promise was held to have no economic value.
