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Formation of Contracts: Consideration & Intentions, Consideration can…

- - - - consideration which is yet to be performed
        
        consists of promised obligation which are intended to be performed in the future
    - - consideration has already been performed.
        
        eg. the book has been delivered as promised by A in his Offer
      - past & executed consideration often confused as both acts have been performed.
        
        executed = performed in exchange for another promise
        
        past = performed without reciprocal promise in mind
        
        Past Consideration Becomes Executed Consideration
        
        Act done at promisor's request
        
        Parties understood act is to be remunerated
        
        Contract must otherwise be enforceable
    - - an act performed prior to (and independent of) the promises being exchanged
        
        Past Consideration is no consideration
        
        the action performed was not done in response to a promise given
  - - - for a promisee to enforce the promise, he must show that consideration has been REQUESTED and moved from him
        
        parties outside contract cannot enforce this promise.
        no consideration flowed from parties outside the contract
      - Promisor need not benefit from the consideration. He could just be in the contract seeing to a promise is delivered. Consideration does not have to be delivered to the promisor
        
        a third party not in the contract can benefit from the contract although he may not enforce it.
    - - Adequacy of Consideration
        
        The law will not inquire the fairness of consideration so long as the parties agree to it willingly
        
        eg. even if 2 cents offered for a cake and is agreed upon-- a consideration is good if it is agreed by both parties
        
        exception to this rule: on the grounds of undue influence & duress
        
        if consideration is grossly inadequate, there could be a victim of some influence
      - Sufficiency of Consideration
        
        Sufficient consideration =
        
        must be of some value in the eyes of the law
        
        goods, services, money, property
        
        performance of contractual duty to third party
        
        forbearance to sue
        
        Note: Forbearance to Sue is only sufficient when
        
        Legal claim must be reasonable and not frivolous
        
        Claimant has an honest belief in the chance of success of the Claim
        
        the claimant has not concealed from the other party any fact which will affect Validity
        
        what does Claim even mean here
        
        Insufficient Consideration =
        
        Moral obligations & motives,
        
        Vague or Insubstantial consideration,
        
        Performance of existing public duty,
        
        Performance of existing contractual duty owed to promisor
        
        Note:
        
        Moral Obligations such as Love & Affection does not constitute sufficient consideration to support a contract
        (eg. failure to pay for parent's expenses)
        
        Motives and Wishes are not good consideration & cannot be enforced
        (eg. death wish / birthday wish / noble deeds)
        
        Note:
        
        Existing Public Duty such as Enlistment by national service is insufficient consideration since the promisee is already under a public duty to perform an act.
        
        SImilarly, Existing Duty to Promisor is not sufficient consideration.
        
        EXCEPTION: evidence that the promisee did something more than that required by existing duties public or private
        
        Partial fulfilment of a contractual obligation does not discharge the promisee's obligations
        
        UNLESS: discharging an existing duty owed to the promisor (a good considertaion)
- - - - Generally: Presumption of no legal intentions for legal relations to form a contract
        
        depends on circumstances of case
    - - Generally: presumption of intention to create legal relations (commercial context = intention to create binding obligations)
    - - a binding commercial agreement may be unenforceable because of an "honour clause" = expressedly states that their agreement is not legally binding
    - - written by one party to vouch for the soundness or quality of a party in a contract with another third party
        
        the party writing ned not be in contract
    - - records the intention of the parties, usually in connection with a proposed commercial project
- - - - the promisee acted in reliance on the promise in such a way as to make it inequitable to allow the promisor to act inconsistently with it
        
        eg. the promisor benefitted from the promisee's actions
- - - - Agency:
        
        agency relationship when a person (principle) authorises the agent to act on his behalf by entering a contract with a third party.
        
        though the person (principle) is not party to the contract, is liable and entitled to enforce the contract.
        
        the agent, is not liable for and not entitled to enforce the contract
      - Assignment of choses in action:
        
        a chose in action = property right/right to possession of something through legal action
        
        a chose in action under a contract may be transferred to a third party under assignment with the full consent of all three parties
      - Singapore: Contracts (Rights of Third Parties) Act (CRTA) -- privity doctrine is reformed
        
        A third party is able to enforce any term of a contract to which he is not party where:
        
        The contract states expressly that he may
        
        The contract purports to confer a benefit on him unless the contracting parties did not intend the third party to be able to sue
        
        Third party is expressly identified in the contract by name.
        
        seeks performance of the contract or claim damages for breach of contract
        
        Does not apply to contracts such as:
        
        Contracts on bills of exchange, promissory notes or other negotiable instruments
        
        constitution of a company that binds the company and its members
        
        registration documents or partnership agreement of a limited liability partnership
        
        contracts of employment where a third party wishes to enforce a term against the employee
        
        contracts for the carriage of goods by sea, international by rail, road or air.
        
        The CRTA will be completely nulled if the contract states that third persons shall have no rights to enforce.