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