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Consideration, ICLR, Capacity - Coggle Diagram
Consideration, ICLR, Capacity
Consideration
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Executed: at time of contract formation, consideration already performed
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Existing obligations
Existing contractual obligation: General: Stilk v Myrick- party already contractually bound to do something with party A, cannot make another contract with same consideration to party A
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Exception: existing contractual obligation can be good consideration if there is a practical benefit to be gained
Williams v Roffey: conditions to establish factual consideration a) A entered into contract with B to do work, supply goods or services in exchange for payment from B b) before complete performance, B has doubt whether A will complete c) B pays A aditional money to ensure completion on time d) as a result of this promise, B gains benefit or avoids disbenefit e) B's promise is not given as result of economid duress f) benefit to B is capable of being consideration
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Existing obligations to third parties: General: New Zealand Shipping co v AM Satterthwaite & co- party can have same consideration under contracts with different parties
Part payment of a debt: Foakes v Beer- paying only part payment of a debt in exchange for being released from rest of liability is not good consideration
Exception: Pinnel's Case- if at creditor's request, some new element is introduced, part payment of a debt can be good consideration eg. payment at different time, place or something other than money
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Promissory Estoppel
General: CLP Trust v High Trees- Allows agreements with no consideration to stand (including part payment of debt) where the promisee has relied on the promise
Restriction: Acts as a shield, not a sword: Combe v Combe- promissory estoppel can only be used in defence against action, cannot be used to sue
Restriction: must be a clear and unequivocal promise that existing legal rights will not be fully enforced: Woodhouse A.C Israel Cocoa Ltd S.A v Nigerian Produce Marketing Co Ltd- promise must intend to create legal relations (express or implied)
Restriction: a change of position in relation to reliance: High Trees- promisee (usually debtor) cannot be said to have relied upon the promise if the reliance was done before the promise
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ICLR
General: Merritt v Merritt- Objective test: would reasonable person think agreement was intended to be binding?
Commercial Agreement: presumed binding and onus on party claimig it was not binding to rebut. Carlill v Carbolic Smoke Ball Co- displayed intention through setting aside money and was detailed enough to be unilateral offer
Social/domestic agreements: presumption agreements are'nt binding eg. Balfour v Balfour shows esp in cases of spouses (before relationship breakdown)
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Jones v Padvatton- (decided not legally binding) even where a lot at stake ICLR must be clear if want a domestic agreement to be binding
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Capacity
Where someone doesn't have capacity, the contract will not bind them
Minor: Contract doesn't bind someone under 18 when contract formed even if other party is unaware. Will become binding once they turn 18
Exception: minor bound by contract to supply them necessaries if it's for their benefit. They are bound to pay a 'reasonable price' rather than the actual cost
Exception: minor will be bound by contracts of employment, apprenticeship or education if it is for their benefit. Football Club v Watford Association Football Club- child not bound as restricted freedom etc
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