CONSIDERATION - QUESTION
Q2) Coco owns a circus and has decided to do a bit of minor repair work. The forthcoming weekend is a
bank holiday and the weather forecast predicts high summer temperatures. Coco always has a lot of
visitors to the circus in such clement weather and can make a lot of money. He therefore decides to get
the Big Top painted before the weekend. He asks Pete to undertake the painting for £2,500. Halfway
through the job Pete realises that it is going to take far longer than he thought. If he is to finish before the
weekend, he will need the assistance of another painter. He tells Coco that he will need a further £800 to
cover the cost. Coco starts to get annoyed but notices Pete packing away his paint brushes and getting into
his van. He agrees to the extra £800. Zara has worked as a trapezeartist at Coco’s circus for some years.
One evening, one of the fire eaters is sick. Zara immediately covers for the act. Thrilled that she has saved
the performance, Coco promises her a salary increase. He later regrets this decision and refuses to
increase her salary. Advise Coco.
The above given situation revolves around the topic of consideration. In order for an agreement to be
enforceable in the court of law it must be supported by consideration. Consideration is one of the most
important ingredients of a legally binding contract which involves exchange of something. Consideration
is a badge of enforceability through which the contract can be enforced in Courts. In the situation
provided, we need to analyze whether a valid consideration exists or not for a contract to be binding. We
see that there are two situations where contract can be formed if a valid consideration exists. Firstly, we
need to determine whether the Coco’s promise to Pete to pay extra £800 would equal a valid
consideration or not. Secondly, we also need to see if Coco’s promise to Zara to increase her salary is a
valid consideration or not.
Consideration was defined in the case of Currie v Misa where it was stated that consideration meant that
one party gets some rights, interest, profit or benefit and the other party receives some detriment, loss, or
loss of right or responsibility. The general rule states that the consideration has to be sufficient need not
be adequate which means in order for consideration to take place there needs to be exchange of something
that has an economic value but it does not need match the market value of the things being exchanged
(Chappell & Co Ltd v Nestle Co Ltd) where the court considered worthless rappers to be a good
consideration. All of the tangible goods and intangible services have some economic value except for the
promises that are based on emotions (White v Bluett). Also, the consideration must move from the
promisor to the Promisee (Tweedle v Atkinson). Consideration could also be a promise not to sue (Cook
v Wright).
Consideration is a fundamental requirement for a binding contract, but there are instances where it is
deemed valid in unconventional ways, as well as exceptions where a promise may be enforced without
traditional consideration. Generally, promises should be done before performing an act, if an act is done
before a promise then it is past consideration which is invalid (Roscorla v Thomas). But the past
consideration can be a valid consideration under three exceptions set out in the case of Pao On v Lau Yin
Long. The three exceptions are that the act was done on promisor’s request (Lampleigh v Braithwaite),
there is an implied understanding on behalf of both the parties that the act is to be paid for, and if the act
was carried out in the present then it would be a valid consideration. The existing duty under law
generally cannot amount to good consideration unless there is some considerably extra being done by the
person under the obligation of law. If the person is doing something extra then it would amount to good
consideration. Moreover, the additional promise under existing contractual duty can only be binding if the
other party does something considerably extra (Stilk v Myrick). However, even if nothing extra is done
but the promisor gets practical benefit from the completion of the act then it would amount to a good
consideration provided that the additional promise is not done under economic duress (William v Roffey
Bros). Additionally, if there is an existing obligation towards a third party, then any promise to another
person to do the existing duty will also be binding. Lastly, the part payment of debt will never equal full
payment unless an extra consideration in the form of an object is provided with part payment or earlier
Q2) Coco owns a circus and has decided to do a bit of minor repair work. The forthcoming weekend is a
bank holiday and the weather forecast predicts high summer temperatures. Coco always has a lot of
visitors to the circus in such clement weather and can make a lot of money. He therefore decides to get
the Big Top painted before the weekend. He asks Pete to undertake the painting for £2,500. Halfway
through the job Pete realises that it is going to take far longer than he thought. If he is to finish before the
weekend, he will need the assistance of another painter. He tells Coco that he will need a further £800 to
cover the cost. Coco starts to get annoyed but notices Pete packing away his paint brushes and getting into
his van. He agrees to the extra £800. Zara has worked as a trapezeartist at Coco’s circus for some years.
One evening, one of the fire eaters is sick. Zara immediately covers for the act. Thrilled that she has saved
the performance, Coco promises her a salary increase. He later regrets this decision and refuses to
increase her salary. Advise Coco.
The above given situation revolves around the topic of consideration. In order for an agreement to be
enforceable in the court of law it must be supported by consideration. Consideration is one of the most
important ingredients of a legally binding contract which involves exchange of something. Consideration
is a badge of enforceability through which the contract can be enforced in Courts. In the situation
provided, we need to analyze whether a valid consideration exists or not for a contract to be binding. We
see that there are two situations where contract can be formed if a valid consideration exists. Firstly, we
need to determine whether the Coco’s promise to Pete to pay extra £800 would equal a valid
consideration or not. Secondly, we also need to see if Coco’s promise to Zara to increase her salary is a
valid consideration or not.
Consideration was defined in the case of Currie v Misa where it was stated that consideration meant that
one party gets some rights, interest, profit or benefit and the other party receives some detriment, loss, or
loss of right or responsibility. The general rule states that the consideration has to be sufficient need not
be adequate which means in order for consideration to take place there needs to be exchange of something
that has an economic value but it does not need match the market value of the things being exchanged
(Chappell & Co Ltd v Nestle Co Ltd) where the court considered worthless rappers to be a good
consideration. All of the tangible goods and intangible services have some economic value except for the
promises that are based on emotions (White v Bluett). Also, the consideration must move from the
promisor to the Promisee (Tweedle v Atkinson). Consideration could also be a promise not to sue (Cook
v Wright).
Consideration is a fundamental requirement for a binding contract, but there are instances where it is
deemed valid in unconventional ways, as well as exceptions where a promise may be enforced without
traditional consideration. Generally, promises should be done before performing an act, if an act is done
before a promise then it is past consideration which is invalid (Roscorla v Thomas). But the past
consideration can be a valid consideration under three exceptions set out in the case of Pao On v Lau Yin
Long. The three exceptions are that the act was done on promisor’s request (Lampleigh v Braithwaite),
there is an implied understanding on behalf of both the parties that the act is to be paid for, and if the act
was carried out in the present then it would be a valid consideration. The existing duty under law
generally cannot amount to good consideration unless there is some considerably extra being done by the
person under the obligation of law. If the person is doing something extra then it would amount to good
consideration. Moreover, the additional promise under existing contractual duty can only be binding if the
other party does something considerably extra (Stilk v Myrick). However, even if nothing extra is done
but the promisor gets practical benefit from the completion of the act then it would amount to a good
consideration provided that the additional promise is not done under economic duress (William v Roffey
Bros). Additionally, if there is an existing obligation towards a third party, then any promise to another
person to do the existing duty will also be binding. Lastly, the part payment of debt will never equal full
payment unless an extra consideration in the form of an object is provided with part payment or earlier
