Consideration

Definition

The tools the courts use to decide what agreements are legally enforceable

The traditional view is that consideration is based on the idea of reciprocity

A promise is not enforceable unless made in return for something or for the promise of something

Currie v Misa

Types of consideration

Excecuted - The promisor asks for something in exchange for his promise, and the promisee provides consideration by giving the promisor what he has requested

Executory - This is the promise to provide consideration, and is also valid

Consideration must be sufficient but need not be adequate

A promise will only be enforced by the courts if
something of value is given in return

Past consideration is not valid

Consideration must move from the promisee

This does not need to be an amount that is
fair or represent market value

Thomas v Thomas

A promise not to complain is not enough but
a promise not to sue is

Performance of an existing duty is not
good consideration

If a party goes beyond his existing duty
this will be good consideration

Part-payment of a debt is not good consideration

Pinnel's case

Promissory estoppel

Where A promises something to B, and B relies on that promise to his detriment, then A should be stopped from going back on his promise

Prevails over common law principles

The exception to the rule of part payment of a debt not being good consideration

Hughes v Metropolitan Railway Co

If a person performed an act before he is made a promise by another person, he cannot use that act as consideration given in exchange for that promise

There is no bargain or exchange where a person performs an act and then receives a promise from another person

Roscorla v Thomas

There is an exception to the rule when the courts take the view that the act was performed at the promisors request and it was implied all along that the goods or services were to be paid for

A person receiving the promise must provide something in return in order for that promise to be enforceable

Thomas v Thomas

A promisee's consideration can be provided to a third party
if requested by the promisor

Bolton v Madden

Third party beneficiaries can enforce their rights under a contract even where they have not provided consideration

Contracts (rights of third parties) act 1999