3.1 Consideration Introduction Consideration essential element in agreement However, it is no important in Deed.

d. o Certain transaction effected by Deed such as transfer of legal estate in land. o Deed - instrument that passes an interest, right or property, creates an obligation binding on some persons. This is particularly important where the agreement involves a promise to act in a particular way in the future. In exchanges where there is an immediate, simultaneous transfer of, for example, goods for money as in most everyday shop purchases!, the doctrine of consideration applies in theory but rarely causes any practical problems. It is where somebody says, for example, "I will deliver these goods next Thursday# or "I will pay you $%,&&& on % 'anuary# that it becomes important to decide whether that promise is "supported by consideration# that is, something has been given or promised in exchange!. ( promise to ma)e a gift at some time in the future will only be enforceable in *nglish law in absence of consideration if put into a special form, that is, a "deed#. +or the re,uirements of a valid deed, see -aw of .roperty /iscellaneous .rovisions! (ct %010.! 2here a promise for the future is not contained in a deed, then consideration becomes the normal re,uirement of enforceability

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Definition Lush J. in Currie v Misa %134!5 a valuable consideration, in the sense of the law, may consist either in some right, interest, profit or benefit accruing to the one party, or some forbearance, detriment, loss of responsibility given, suffered or underta)en by the other. Commentary: 6ou will see that it is based around the concept of a "benefit# to the person ma)ing the promise the promisor!, or a "detriment# to the person to whom the promise is made the promisee!. Not necessary to be advantageous in common sense in life +or example, promise to stop from smo)ing will be a legally detriment and provide consideration even though this is beneficial to promisee#s health *ither is sufficient to ma)e the promise enforceable, though in many cases both will be present. This is generally ,uite straightforward where one side performs its part of the agreement. This performance can be loo)ed at as detriment to the party performing or a benefit to the other party, thus providing the consideration for the other party#s promise. That mean no necessary need both, either one is enough. Consideration example ( promisor! promise 7 promise! to paint his house (#s promise will become enforce if 7 provide consideration 7#s action either one!5 o .ay money o Do some services o 8ot to do something that he otherwise might have done .romisee must give something in return to convert (#s promise into binding ctt. #$ecuted and #$ecutory *xecuted Consideration differ from executory! .resent in 9nilateral contract .romisor will only bind to his promise legally if promisee perform the act re,uired. *xecuted consideration is different with .ast Consideration o *xecuted consideration is promise followed by an act o .ast consideration is act followed by promise .ast consideration is not a good consideration discussed below!. Consideration is sufficient even it is in the future executory! /ore difficulty arises where the agreement is wholly "executory# that is, it is made by an exchange of promises, and neither party has yet performed!. +or eg. , : promise to send the goods and 6 promise to pay on delivery. /oney payment in the future not yet performed! is sufficient as consideration It is clear that *nglish law treats the ma)ing of a promise as distinct from its performance! as capable of being consideration Currie v Misa s definition ignore the e$ecutory ty"e% as &e cannot said it is benefit or detriment for something that is not yet ha""en.

!y"e:

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'nother definition (for e$ecutory) Lord Dunedin in Dun*o" +neumatic !yre Co Ltd v ,e*fridge - Co Ltd %0%4! o (ct or forbearance or promise by one party is the price for a promise of another party o This show idea of exchange, done or not done or a promise exchange for another promise! (nother definition of consideration!

Commentary: Thus, in a wholly executory contract, the ma)ing of the promise by each side is consideration for the promise made by the other side so rendering both promises enforceable!. This leads to a circular argument. ( promise cannot be a detriment to the person ma)ing it or a benefit to the person to whom it is made! unless it is enforceable. 7ut it will only be enforceable if it constitutes such a detriment or benefit!. +or this reason it is perhaps better to regard the doctrine of consideration as simply re,uiring "mutuality# in the agreement that is, something being offered by each side to it! rather than trying to analyse it strictly in terms of "benefits# and "detriments#. .o&ever% Currie v Misa sti** remain usefu* to determine &hether there is consideration (a""*ied in /i**iam v 0offey 1ros n Nicho**s Ltd <discussed later=! 7ut it cannot cover all decisions of court. Consideration must move from the promisee but not necessarily to the promisor. Consideration need sufficient but not ade,uate Consideration not consist of existing duty Consideration must not be past.

0u*es of C: o o o o

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1. Consideration must move from the "romisee but not necessari*y to the "romisor C*aimant c*aim from the "romise &hich is occur bt& "romisor and "romisee &ithout No C "rovide any consideration !&edd*e v 't2inson %1?% +5 o C married D#s daughter o D and C#s father enter into writing agreement that D will paid @;&& and C#s father will pay @%&& to their children#s marriage portion. o (greement contains the following words5 "C has the full power to sue the parties in any court of lawAfor aforesaid promisesA# o D failed to pay and passed away. o C bring action H5 o 2ightman '5 no stranger to the consideration can ta)e the advantage of a contract although ma)e for his benefit o Crompton '5 Consideration must move from party entitled to sue promisee! o +rom the Budgement, ; reason why C no right to claim5 C not a party within the contract C did not provide consideration o The main point is C did not provide consideration. o 7ecause even C considered within the ctt, he still no right to claim as no consideration provided. under privity, discussed next few chapters! Love and affection? o C#s counsel argue that consideration moved from C#s father and the ctt is benefit to C, natural love and affection btw father and son gives the C the right to sue Bust as the consideration moved the C. o H5 Natura* *ove and affection is not sufficient consideration o 'na*ysis of the cases% &hy C s father (instead of C) suing the defendant for his "romise3 o Ceason by -. Denning, reason5 C#s father had not done his promise also5 pay @%&& for the couple. Cule of privity a person not privy is person not in the party! modified by Contracts (ct Cight of Third .arty! %000- >rd parties who provide no consideration may succeed in claiming discussed in later chapter! 4a*id C.

+romisor argued that there is no consideration to&ard him but there is from "romisee

In this case, C#s father provided the consideration benefit to his son claimant! instead of .romisor Defendant! In another example, when using debit card to buy things. 0 v Lambie! %01; Issuer promise to pay for the use of debit card and supplier of the goods provide consideration to the customer. Consideration not pointed to promisor!.

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+romisor argued that consideration bring no detriment to "romisee

4a*id C

/i**iam v 0offey 1ros. +5 o D enter contract with C. o There is penalty clause o Transaction proved unprofitable to C o C unable to complete the transaction on time o D promised to pay more. o C complete wor)s and claim o D refuse to pay. H5 o (rgument5 8o consideration moved from promisee o 's *ong as "romisee confer benefit to "romisor% even though there is no detriment u"on "romise% then it is sti** va*id consideration. o 7oth side had the commercial advantages. o Eo, no detriment still acceptable. Commentary This further shown in the case #dmonds v La&son ;&&& 5t &as he*d that consideration is benefit to the chamber ("romisor) in securing the suitab*e for future tenancy. !here is benefit to "u"i* in the form of education 7ut no detriment suffered from pupil there is no fee from pupil also!.

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6. Consideration must be sufficient but need not be ade7uate Introduction Consideration must be sufficient means something which the courts will recognise as *ega**y ca"ab*e of constituting consideration. The fact that it need not be ade7uate indicates that the courts are not generally interested in &hether there is a match in value between what is being offered by each party. ( ctt maybe a bad bargain but is a good ctt. *g, ( can sell his own car worth @%&&&& to 7 for @% in the absence of fraud or other legal wrong. The courts will not interfere Bust because it appears that a person has made a bad bargain. 4a*id C

+romisee "aid one "ound for one year rent

!homas v !homas %1D;! +5 C#s husband expressly stated agreement! the wish that the C, after his death, C can live in his cottage as long as she desired (fter husband death, C enter agreement with D deceased husband#s executor! with the term of to pay $% per annum rent. -ater, D refuse to convey the cottage to C. H5 (lthough C#s husband has the motive, but motive is not same as consideration. Consideration is something value in the eye of law and must moved from promisee. (t the first agreement by husband, there is not consideration because consideration is not move from C promisee! This consideration is moved from promisor C#s husband!. 7ut later, there is binding contract because, there is "sufficient# consideration- $% per annum. The fact that $% per annum was not a commercial rent was irrelevant, because the courts do not concern themselves with issues of "ade,uacy#.

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0ubbish &ra""er as va*id consideration3

4a*id C.

Cha""e** v Nest*8 %0?&! 9: D-8estle, C-Chappell D offer to supply record of C#s musical wor) to anyone sending > wrappers of D#s product with %s?d ordinary price is ?s ?d!. C claimed that this infringe their copyright in the song. D relied on s.1 of Copyright Cight (ct %04? which permitted ma)ing record of the musical wor) that manufacturer in this case is D! intend to sell by retail provided that he gave the owner of the copyright prior notice and pay the ? F G of the ordinary retail selling price of the record. D notified C that the ordinary retail price would not be greater than %s ?d. C claim that this did not satisfied the s.1 re,uirement as wrapper did not be ta)en into account. D denied the wrapper was not part of consideration, they were worthless. C sought an inBunction to restrain the D from infringe their right of musical wor). .: /aBority assent! 2rapper although worthless, but there is great important to D. There is large number of transaction->&&&& records Eo, wrappers are part of consideration and will help D to get more sales even though there are no value for D. The parties can choose what consideration they want. 5f he does something (a) and "ay money (b) in order to get the su""*y goods% then (a) and (b) &i** be regarded as consideration. Eo, the ordinary retail price %s ?d invalid, and there was no ordinary retain price in this case. D not following the section 1, and therefore, they infringe C#s right. C entitled to an inBunction. 6ou will see that -ord Eomervell Bustifies the courts# approach to the issue of "ade,uacy# by reference to "freedom of contract#5 "( contracting party can stipulate for what consideration he chooses#. The person may have other, undisclosed , reasons for accepting consideration that appears inade,uate. Dissenting .ersuasive but not binding!5 If someone bought the wrapper from retain shop not from 8estle! or ac,uire wrapper from others who buy the chocolates, then it is not the same transaction benefit to 8estle. Eo, wrapper cannot be considered as consideration in this point.

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!em"orary time:*osing of "ossesion

4a*id C.

1ainbridge v 9irmstone %1>1 +5 D want to weigh ; boilers belonging to C C gave permission to do so. D promised 5 "within reasonable timeA leave and give up the boiler as in perfect condition# 7ut D left the boiler in bits and pieces form C sue for damage. D argued there is no consideration as there is neither detriment to C nor benefit to D. H5 D had the benefit to "weigh# the boiler. C had the detriment for tem"orary *osing the time of "ossession of the boilers.

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C*aimant did not "romised not to sue but *ater sue D

4a*id C

'**iance 1an2 v 1room %1?4 +5 D owe money to C ban)! D promised to give some securities to C If something is security for a loan, you promise to give that thing to the person who lends you money, if you fail to pay the money back. In return, C no giving any express promise not to sue D D failed to settle the documentation of the security. C bring action to enforce the security. D argue that there is no consideration from C H5 (lthough there is no actual promise by claimant to abstain from suing 7ut in the fact, C had given benefit of some degree of forbearance and D received it.

Commentary However, in this case, it is difficult that what detriment suffered by C as C can sue to enforce the security anytime he wants. .erhaps, Court will be more ready to find a consideration regard to issue of Bustice, policy or in actual commercial practise. This is clear in case below which involve domestic case5 Compare Combe v Combe %04% +5 D-ex husband promised to pay maintenance fee to C-promisee- ex-wife ? years later, he failed to pay C was trying to sue D for a promise to pay her maintenance. D argue that there is no consideration from C for the promise. H5 Huestion whether wife forbear to sue is sufficient considerationI !here is no evidence of any intention from husband that &ife shou*d forbear to a""*y to court for the maintenance% 1esides% there is no either e$"ress or im"*ied &ord from husband The wife can apply to Divorce Court if she choose to. However, even she applied, it is unli)ely that Divorce court will favour her as as wife#s income is more than husband#s. Eo, no consideration from wife.

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C truthfu* be*ieve he has right to sue but in fact there is none% and he forbid to sue initia**y 4a*id C Ca**isher v 1ischoffsheim %13& +5 C believed he had the right to claim his money. C about to commence proceeding to enforce payment. D promise to give some security if C forbear to sue In fact, the claim not exist. H5 If he genuinely believed that he had a chance of success to sue then his forbearance to sue will be good consideration Confirm the principles5 (greement for a forbearance J good consideration D 2ne& he has no right to sue but "romised not to sue No va*id C /ade v ,imon %1D? H5 C )new there is no right to claim and still promise to forbear to sue. This is not a good consideration, therefore no contract

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9orbearance to do D refrain from he has the *ega* right to do 4a*id C.

.amer v ,id&ay %10% 9E case-persuasive-not binding! +5 o 9ncle promised to pay to his nephew if he stop drin)ing li,uor, smo)ing etc until ;% years old o 8ephew-C followed. o 9ncle passed away. o *xecutor-D refuse to pay H5 o D claim there is no consideration from C-promisee. o D further stated there is no detriment from promise as it benefit to him stop from drin)ing, smo)ing..! o o o o Court he*d that C had the habit (*ega**y) to drin2 and smo2e. No& he restrain to do so. .e is *imiting his *ega* freedom. This is enough for consideration

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D refrain from &hat he has no *ega* right to do

N. 4a*id C

/hite v 1*uett %14> +5 D indebted to his father D always complained to his father. +ather promised that he will release the liability of D#s debt also out of natural love and affection! if D stop complaining him. D did that. (fter father passed away, executor- defendant claim from D H5 (ction succeeded. There is no consideration by D +ather had the right to distribution of his property as he li)e. ,on had no right to com"*ain about that. ,o% if in the first "*ace% he had no right to com"*ain% and he forbear to do it *ater% that cannot regarded as consideration 5f other&ise% then everyone can start to sto" com"*aining and c*aim there is consideration for sto" com"*aining. Court further explain there is no economic value <which cause a lot of confusion, discussed later= that D stop complaining.

Commentary +romissor s benefit issue (nother point to argue in .amer v ,id&ay, there is benefit to uncle to have the benefit to have a close relative which has good habit. This prove in the case5 ,had&e** v ,had&e** %1?& +5 o 9ncle promise to support allowance per year! C for his marital life o (fter that, 9ncle passed away o C claim from executor-D H5 o Kne of the reason is that there is benefit to uncle5 9ncle "interest# in close relative marriage. o Eo, there is consideration ,ocia* "o*icy issue Kne of the reason that /hite v 1*uett n .amer v ,id&ay decided differently maybe due to social policy issue In White, maybe we can argue that son had the legal right to "spea)# complain! and not he refrain from "spea)#, is it same in Hamer that he limit his legal freedomI /ore acceptable if enforce uncle#s promise rather than father#s promise.

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Consideration sufficient and economic value argument /hite v 1*uett %14> +5 D indebted to his father D always complained to his father. +ather promised that he will release the liability of D#s debt also out of natural love and affection! if D stop complaining him. D did that. (fter father passed away, executor- defendant claim from D H5 (ction succeeded. There is no consideration by D Kne of the reason5 D cease from complaining does not have economic va*ue. 7ut it is difficult to see that the wrappers in Cha""e** v Nest*8 had any economic value either. In .amer v ,id&ay, there is still no economic value for someone to stop smo)ing and drin)ing.

/ard v 1yham %04?! Denning -' found consideration in the mother#s promise to provide for the child#s up)eep. This clearly has economic value, but raises the ,uestion of whether doing something which the law already obliges you to do can ever be good consideration discussed later! The maBority of the Court of (ppeal, however, seems to have found consideration in the mother#s promise to ensure that the child &as ha""y. This does not invo*ve anything of economic va*ue. Can it be distinguished from 2hite v 7luett I It is difficult to see how.

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#dmonds v La&son ;&&&!. H5 .upil did not provide consideration as regards her pupil master, but did do to the chambers. This was on the basis that the chambers benefited from attracting talented pupils who might become tenants and enhance the development of the chambers. (s -ord 7ingham put it5 "2e ta)e the view that pupils such as the claimant provide consideration for the offer made by chambersA by agreeing to enter into the close, important and potentially very productive relationship which pupillage involves#. The economic benefit to the chambers, if any, is therefore indirect J in that in the future the pupil may become a tenant and bring additional wor) to the chambers, enhancing its reputation and increasing the income of its members. (gain, however, the court does not appear too concerned about the issue of "economic value#. This suggests, as does 2ard v 7yham, that this element in the definition of consideration has *ess im"ortance than is sometimes a**eged. 6ou might also have noticed that the pupil could have argued that she was providing consideration through suffering at least a short-term economic detriment, in that she could have ta)en more secure paid employment elsewhere. This line of argument was not, however, explored by the Court of (ppeal. !his suggests that the re7uirement of economic va*ue may no *onger be "art of the doctrine of consideration.

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D fe*t a""reciate to &hat C did% and out of mora**y fee*ing% he "romise C a re&ard but *ater refuse to "ay

N. 4a*id C.

#ast&ood v ;enyon %1D& +5 Claimant, guardian to minor , Earah. 2hen she grow up, she promised to reimburse C. Earah married to a man, Defendant. D promised the same thing. D failed to do afterward C bring action H5 the doctrine would remove the necessity for any consideration at all, inasmuch as the mere fact of giving a promise creates a moral obligation to perform it. However, the enforcement of such promises by law plausibly reconciled by the desire to effect all conscientious engagements, but might be attended with mischievous conse,uences to society one of which would be the fre,uent preference of voluntary underta)ings to <=>1? claims for Bust debts. Euits would thereby be multiplied, and voluntary underta)ings would also be multiplied, to the preBudice of real creditors. this also can be )nown as "past consideration# is not a good consideration!

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3. Consideration not consist of e$isting duty

Introduction There are three aspects to this topic, dealing with three different types of existing obligation which may be argued to constitute "consideration#. %. Kbligations which arise under the law, independently of any contract. ;. Kbligations which are owed under a contract with a third party. >. Kbligations which exist under a contract with a person who has made a new promise, for which the existing obligation is alleged to provide good consideration. The third situation is, essentially, concerned with the variation of existing contractual obligations as between the parties and the extent to which such variations can become binding. 1st "rinci"*e: under *ega* *a& to "erform% no consideration 5ntroduction .ublic official such as a firefighter or a police officer! agrees to carry out one or more of their duties in return for a promise of payment from a member of the public. In that situation the promise of payment will not genera**y be enforceab*e. This is either because there is no consideration for the promise the public official is only carrying out an existing duty! or, more probably, because public policy generally suggests that the *a& shou*d not encourage the o""ortunities for e$tortion that enforcing such a promise would create. D "romised C a re&ard for C s sub"oena N. 4a*id C

Co**ins v @odefroy %1>% 9: o D promised to pay C money for given evidence in a court action which C served with subpoena .: o C under legal duty to attend trial, therefore no consideration provided, then no ctt.

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D re7uest for s"ecia* "rotection from "o*ice

4a*id Consideration

@*asbroo2 7ros -td v @*amorgan CC %0;4 +5 o D as) policeman to protect D#s wor)ers o .oliceman said that, the guard can be deployed swiftly if any situation happens. o D insisted that policeman should present at wor)ing place to ma)e sure the safety. o D promised to pay. o Cases resolved. o D refused to pay. o D argued that police do no more than their existing duty H5 o .olice#s duty is to provide ade,uate protection to persons. o 7ut if a person re,uire special protection from the police the police without discharge his basic protection!, then, there is a consideration. o +rotection of a s"ecia* character "resumab*y means something more than "rotection directed to individua* needs rather than to the genera* interests of the "ub*ic 8ow under s.1>(1) of +o*ice 'ct 1AB=, police can claim under special police service which re,uest by other persons.

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D did not re7uest for s"ecia* "rotection but created a situation &hich re7uire *arge "o*ice su""ort on the surrounding

N. 4a*id C.

0eading 9estiva* v /est (C'C) Cor2shire +o*ice 'uthority ;&&? +5 2here a music festival organiser deploy officers on the festival site as they had done in previous years, which the defendant paid for on the basis that they were Lspecial police servicesM which the defendant had re,uested under section ;4 %! of the .olice (ct %00? % . During discussions prior to the ;&&> festival, the police authority informed the defendant that it intended to provide very few officers on the festival site but would deploy large numbers of officers in the surrounding area who would be on call to deal with any maBor incidents. !he defendant made c*ear that it &ou*d not "ay for the cost of officers de"*oyed off the site% a"art from those managing traffic% but that it &ou*d be "re"ared to ma2e a "ayment if the "o*ice authority based any officers on the site. In the event the defendant managed the safety of the festival site with hired security staff, and the police authority deployed a large number of officers in the surrounding area as it had proposed. 2hen the defendant refused to ma)e any payment to the police authority, apart from paying for the cost of traffic officers, the police authority brought proceedings claiming the costs of the entire police operation, pursuant to section ;4 %! of the %00? (ct. H5 o no agreement had been reached between the parties that 2Ns claim was bound to fail because it was very hard to see how s.;4 %! could operate without a contract, even though it did not expressly say so. o C had not provided special police services. o !he "redominant "ur"ose of CDs o"erations &as the "rotection of the "ub*ic at *arge% a*beit occasioned by the festiva*. o 2hen considering the application of s.;4 %! it was inapposite to consider special police services without considering the re,uest at the same time. o (lthough much of what C did outside the festival site was arguably for the dual benefit of the public and C, 0 had not re7uested it. o There was a strong argument that where promoters put on a function that was attended by large numbers of the public the police should be able to recover their additional costs of policing the event and the local community affected by it. o That seemed only Bust where the event was run for profit. o .o&ever% that &as not the *a&

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D as2ed once for "o*ice service and "o*ice come regu*ar*y after&ard .arris v ,heffie*d Enited 9ootba** C*ub Ltd

4. Consideration

+ootball matches too) place at premises in Eheffield belonging to the defendants, a club. 9ntil %03& the club had made special arrangements for the attendance of police officers at matches for which payments had been made. Thereafter the police had continued to attend at matches both inside and outside the ground but the club formed the view that the chief constable was obliged to arrange for police attendance in order to fulfil his duty to maintain law and order and to protect life and property The Chief Constable billed the club for these Ospecial police servicesOP the club refused to pay contending that the police attendance did not contribute Ospecial services.O Held, dismissing the appeal, that the provision of officers to attend regu*ar*y inside a c*ubDs grounds constituted the provision of Ospecial police servicesO 4a*id C

Mother *oo2 after chi*d and ma2e sure the chi*d ha""y

/ard v 1yham %04? +5 o D-father, C-mother o D and C unmarried and had a child o D as) neighbour to stay with him. o C as) the child stay with her o D promised to pay provided C can show that the child will be well loo)ed and happy and also the child must agree to stay with C. o D )eep paying to C o C married to another man o D stop paying. o C bring action H5 o Loo2ing for chi*d is *ega**y bound to mother. o C had e$ceed the statutory duty to loo) after a child and ma2e sure the chi*d ha""y . o Eo there is consideration from C.

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Commentary 2e may argue that "child being ta)en care# and "child being ta)en care and happy# are e,ual to same things. Court seem try to stretch the limit of consideration to ma)e sure there is Bust result Compare Lord Denning come to same conclusion with different interpretation5 o *ven someone under existing duty to perform sti** can regarded as good consideration as it bring benefit to "romisor o +or eg in this case, father get the benefit from C that it is better the child ta)en care by C mother! as compared to neighbour. o Eo, D should honour his promise. -ord Denning considered the factua* benefit as good consideration. -ord Denning repeat the same view under /i**iam v /i**iam %043 case o ( promise to perform existing duty which benefit to "romisor is sufficient consideration as long as there in no contrast with public interest. .ublic interest issue can be seen in the case of5 Co**ins v @odefroy %1>% o 9: D promised to pay C money for given evidence in a court action which C served with subpoena o .: C under legal duty to attend trial, therefore no consideration provided, then no ctt. o Eo, even under existing duty, because giving evidence as public interest, there should not be consideration provided. .ublic interest issue may related under economic duress discussed in other chapters!

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6nd : "romise to "erform% an e$isting contract ob*igation .romisee .romisee .romisor

.romise to .romisee to do something that .romisee contractually bound to do it with >rd party contract

>rd party 4a*id C.

D "romised to a&ard C if C get married &hich in fact C a*ready engaging at the moment

,had&e** v ,had&e** %1?& +5 o C in contractually engagement o 9ncle promise to support allowance per year! C for his marital life by saying5 I am glad to hear of your intended marriageA. (s I promised to assist you at startingA o (fter that, 9ncle passed away o C claim from executor-D H5 o D argued that there is no consideration from C as he is contractually bound to marry. o %st issue5 Did C suffer lossI o C suffered detriment that he may incur additional expenses which he expect from promise allowance from uncle o ;nd issue5 Did 9ncle benefitI o 9ncle "interest# in close relative marriage. o Eo, there is consideration.

Commentary nly a gift Dissenting -ord5 there is only a conditional gift !o detriment or benefit 8o additional detriment by promisee 7enefit to promisor seem no economic va*ue However, economic value issue seem not so important! I"CL#? Dissenting5 family relation, is there ITC-CI Confirm in Jones v +adavatton ITC-C chapter!, there is presumed no itclr in this domestic agreement. However, it can be rebutted!

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+romised to do something if C did the act re7uired &hich a*ready under contractua* ob*igation

4. C

,cotson v +egg %1?% +5 o C ctt with : o In ctt, C shall deliver to whomsoever : directed. o D promised to C to unload the product providing C deliver to D. o from this point, C already bound to do the things that directed by D! H5 o D argue there is no consideration by C as there is no detriment to C in which the things already bound to do. o D had the benefit o !here is no im"ortant &hether C has contract &ith 3rd "arty

Commentary There is detriment suffered by C. If D cannot done his promise, then maybe C will be sued by : due cannot fulfil the condition in ctt therefore will breach the ctt. This is distinguish with the >rd limb that existing ctt duty not a consideration Etil) v /yric)! This limb be regarded as exemption to the >rd limb (nd in these cases, there is no involvement of public policy issue which it involved in case Etil) v /yric)

Confirm by #urymedon %034 .rivy Council +5 o D unload a cargo from ship which they already contractually bound to do it. o 9nder C#s promise, they will be exempt from liability if any accident happened. H5 o performance of act is sufficient consideration for C to exempt D from liability for damaging goods. o This is benefit to C to have goods unloaded. o #ven though o&ed ob*igation to 3rd "arty% there is sti** va*id consideration as in Ecotson v .egg.

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3rd :e$isting ob*igation F that o&ed under a contract &ith the "arty ma2ing the ne& "romise 5ntroduction Traditional rule5 performance of existing contractual duty is not a good consideration Ceason5 promisee not provide any consideration by promise to perform existing contractual duty! for a new promise made by promisor.

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+romise to the cre& if continue to &or2 then re&ard &i** be given

4a*id Consideration

,ti*2 v Myric2 %1&0! 9: o During voyage , ; seamen deserted at a port before arrive destination. o D-captain, unable to find replacement seamen. o He promised to pay the salary of the ; deserted seamen to remaining crew provided they stay until arrive at destination. o 2hen arrive, D refuse to pay. .: Consideration issue o Crew had not provided any consideration for the promise. o They are performing under existing contractual duty. o 'udge give the ; example which might give rise consideration5 If crew at free liberty no ctt!, then they choose to stay, they may provide consideration If captain unpredictable discharge ; crew, then others not been compelled to ta)e the whole duty and they agreed later may provide consideration. o The situation in this case are expected as emergency within contract o Desertion of cre& Gust same as death occur during the voyage. o !he "erformance of an e$isting contractua* ob*igation cou*d never be good consideration for a fresh "romise from the "erson to &hom the ob*igation &as o&ed. o The sailors# contract obliged them to sail the ship bac) home. o Thus in bringing the ship bac) to -ondon they were doing nothing more than they were already obliged to do under their original contract. o This could not be good consideration for a promise of additional wages. +ub*ic "o*icy o This decision derived from the earlier case .arris v /atson %30% o 9: Captain promised to pay extra to the seaman to navigate even when in danger situation Captain refuse to pay later o .: If all seaman insist extra paid for danger situation, then there will be many sin)ing cases occur if captain refuse to pay. It is up to captain to pay extra when they thin) is proper. o Eo, due to public policy, law should not encourage a situation that might lead to extortion by seaman o However, there is no similar situation5 "extortion situation# in this case. o The promise is from the captain but not from the crew. $o as conclusion, consideration issue much preferable as the main ratio.

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Contrast .art*ey v +onsonby %143 +5 o The ship with >? crew. o (t one of the port, there is %3 sailor desert and %0 remaining. o D J captain, promised to pay extra @D& to continue the voyage to reach destination o They agreed and shipped to destination. o D refuse to pay H5 o Claimant succeed in action o !here are too many desertion of cre& ma2e the voyage become dangerous o ,o% the remaining cre& not more bound under origina* ctt to "roceed the voyage and free to enter another fresh bargain o This will treated as discharge of ctt under frustration discussed in later chapter!. o The remaining crews doing more than their original contract would have obliged them to do. o Eo, entitled to claim. 4. C.

+romise to increase additiona* "ayment under origina* ctt if increase *etter of credit

!he 't*antic 1aron %030 8orth v Hyundai! +5 o Due to devaluation of 9E dollar, D-promisee as)ed C-promisor to increase additional %&G payment o Eo, C as) D to ma)e an increase letter of credit Letter of credit J document provided for draw draft written order to a ban) to pay money to sb! upon a ban) o D did that. o C later claim there is no consideration provided for increase payment. H5 o D increase the letter of credit which increase additional contractual obligation in result of increase detriment o Eo, this form the consideration for promise to increase payment. There is other issue in this case, here only discuss consideration part.

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D "romised to "ay more for his "ractica* benefit from "romisee 4. C /i**iam v 0offey 7ros. Q 8icholls Contractors! -td. %00% +5 o D enter contract with C. o There is penalty clause o Transaction proved unprofitable to C o C unable to complete the transaction on time o D promised to pay more. o C complete wor)s and claim o D refuse to pay. H5 o It seemed that C had done not more than his contractual duty o 8o additional detriment suffered by him and no benefit confer to D o 7ut Court held that promise is binding o There is "ractica* benefit for D5 *nsure C finish the wor) on time (void penalty for delay (void trouble to engage another carpenter to continue the wor) o o o o o Consideration must moved from promise? However, Court had answer that purpose of consideration moved from promisee is to bring benefit to promisor. *ven promisee not suffer then it is still acceptable. In this case, benefit to promisor D! is not moved from promisee C!. There is enough with practical benefit. *ven though there is un)nown consideration moved from C, but there is commercial advantage to both side in pragmatic view

o Huote5 7usiness /an )now their business very well even when he grant a indulgence, so to find a consideration from the earlier correspondence is not a difficult tas). %rinciple of consideration can be good when performing the contractual duty5 ( contract with 7, ( supply goods or service to 7 in return of payment 7efore ( complete, 7 has reason to doubt whether ( will be complete on his side duty 7 promise to ( an additional cost for completion on time In the result, 7 obtain practical benefit 7 promise is not under economic duress e.duress5 ( is forcing 7 to promise to pay more than listed in ctt, if otherwise, ( will not finish wor). ( ta)e the advantage from 7. 7 forced to pay more! Eo, benefit to 7 can be regarded as consideration to 7. .romise is binding!

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Commentary Contravene with $tilk v &yrick? o Court denied. o This only limits the application of the principle in Etil) v /yric) where promisor had no benefit. o +ractica* benefit on*y *imited &hen "romisor benefit but not to the case &here "romisor gain no benefit. o $tilk principle is during voyage during war time which %1& years ago, so today it should subBect to limitation its application. o Eo, in this case, court entitled to do hold there is consideration. o In $tilk, a promise will remain enforceable unless given under seal. o 7ut in this case, party promise to ma)e payment because he will get benefit from promise for continuing relationship. o However, still not overruled. Why cannot use %romissory estoppel? o .E only can use a shield but not a sword. discussed next chapter! -ord clearly stated there is no contravene with the Etil) v /yric) He said there is limited applying this principle, for example, it cannot applied in the case that promisor gain no benefit li)e in Etil) v /yric) 7ut, Captain in Etil) v /yric) seem to have the same "ractica* benefit from it Kne possible distinction is5 There is presence of public policy war time involve! in the Etil) v /yric) This is to protect the owner of the ship from being threaten by the disafftected crews. Eo, promise to pay extras was not supported by consideration. .o&ever% must remember that ,ti*2 v Myric2 decision is from .HL and remain not oeverru*ed but /i**iam decision is CH'.

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Application of William principles +irstly, it only be applied where there is no D"ractica*D benefit to the promisor, the promise will be Ngratuitous# and unenforceable. Eecondly, on the facts of 2illiams v Coffey 7ros, although 2 did not underta)e to do any wor) additional to that which he had originally underta)en to do, one might argue that the institution of and adherence to the ne& &or2 scheme constituted a different "erformance so that, applying the traditional approach, there was consideration since he was not obliged to perform in that way. o It would appear that this consideration if valid, would be found in the performance is the contract was unilateral o Knly 2 perform then only promise from C can be enforced <(nson#s view= Thirdly, as will be seen, in the conte$t of "art:"ayment of a money debt, the Court of (ppeal has, since 2illiams v Coffey 7ros, dec*ined to have regard to D"ractica*D benefit o 0e ,e*ectmove %004 Doubted point5 ,outh Caribbean !rading Ltd (,C! ) v !rafigura 1eeher 14 ;&&D Colman ' doubted the correctness of the decision in 2illiam v Coffey He said that it is inconsistent with the long standing rule that consideration must move from the promisee However, this can be counter-argued by the (nson#s point that in fact promisee had provide the consideration.

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=. +ast consideration
5ntroductio n Consideration must be given after the promise for which it is given to ma)e it enforceable. ( promise which is given only when the alleged consideration has been completed is unenforceable.

+romise a re&ard to "romisee for his "ast contribution N. 4a*id C. 0e Mc'rd*e %04%! o +5 The plaintiff had carried out wor) refurbish a house not re,uested! in which his brothers and sister had a beneficial interest. He then as)ed them to contribute towards the costs, which they promise to do so. (fter that, they refuse to pay. o H5 It was held that this agreement was unenforceable, because the promise to pay was unsupported by consideration. The only consideration that the plaintiff could point to was his wor) on the house, but this had been completed before any promise of payment was made. .romise only show gratuitous and unenforceable in court The result still same even there is written down agreement. '(ception +romisor as2 "romisee to "erform then after&ard "romise a re&ard and after this refuse to "ay 4a*id C

Lam"*eigh v 1rath&ait %?%4 o +5 D as)s C to obtain a pardon from Ring. C performs it. D promised to give C @%&& D later denied it. C claim for it. o H5 If performance is under voluntary, then there is no consideration to uphold an agreement 7ut, the performance is re,uested, then D is bound to his promised.

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+romisor as2 he*" from "romisee% a*though did not "romise to "ay at the time but e$"ected &i** "ay to "romisee at that time% *ater "romised and brea2 the "romise Casey s +atent% 0e %10; +5 o /anager was been approached to develop a commercial patent. o He promised for a %S> share after this. H5 o He had a good claim o If the past service implied there is going to be paid, o then when you get into subse,uent document a promise to pay, o .romise treated as evidence which fix the reasonable amount for the service 0obert Du$bury: o If you call a local garage to repair your car, then you cannot expect for free. o 7ut if you call your friend, then it maybe otherwise.

4a*id C.

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,ubse7uent "romise re"*ace the initia* "romise to a&ard C &hich 6nd "romise contended as &ithout consideration. D refuse to fu*fi* any "romise

4. C.

+ao Hn v Lau Ciu Long %01& +5 o D re,uests a promise from C that C will retain their shares for a year. o D agreed to would protect C from any loss by will buying the shares at certain "rice after the year. o ( subsidiary agreement entered (greement %! o -ater, C found that they are losing any possible rising in mar)et price, C refuse to sell the share as in agreement o D would li)e to sue but worry about this will destroy their company image o D signed an indemnity replace the subsidiary agreement that they will indemnify C if mar2et "rice fa**s *o&er than that. (greement ;!. o The share did fall in the end before the period end o D refuse to pay and that the indemnity agreement unenforceable due to lac) of consideration from C. H5 o -ord Ecarman laid down three conditions which must be satisfied if the exception is to operate. %. The act constituting the consideration must have been done at the promisor#s re,uest. Eee, for example, Lam"*eigh v 1raith&ait %?%4!.! ;. The parties must have understood that the wor) was to be paid for in some way, either by money or some other benefit. <implication of promise= Eee, for example, 0e Casey s +atents %10;!.! >. The "romise &ou*d be *ega**y enforceab*e a valid consideration! if it had been made prior to the acts constituting the consideration. o (ll three features are present in this case. o The promise given to +u Chip under the main agreement not to sell the shares for a year was at the first defendantNs re,uest. o The parties understood at the time of the main agreement that the restriction on selling must be compensated for by the benefit of a guarantee against a drop in price, <implication of promised would be legally enforceable.= o Knce it is recognised, as the 7oard considers it inevitably must be, that the e$"ressed consideration (second "romise by D) includes a reference to the plaintiffsN promise not to sell the shares before (pril >&, %03D - a promise to be performed in the future, though given in the past - it is not possible to treat the defendantsN promise of indemnity as independent of the plaintiffsN antecedent promise, given at the first defendantNs re,uest, not to sell. o The agreed cancellation of the subsidiary agreement left, as the parties )new, the plaintiffs unprotected in a respect in which at the time of the main agreement all were agreed they should be protected. o ;nd promise from D is enforceable.

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Commentary o +rofessor !reite* said5 o Consideration for promise ( can consist not only of a "ast act done by 7 at (#s re,uest, but now in .ao Kn case show that, included ear*ier "romise (consideration) made by 7 at (#s re,uest ;nd condition issue o The second of these conditions will be the most difficult to determine. o This seems li)e an im"*ication of "romise. o The court will need to ta)e an obGective a""roach and decide what reasonable parties in this situation would have expected as regards the ,uestion of whether the wor) was done in the clear anticipation of payment. o There is more li)ely implication of remuneration will arise in commercial cases such as in 0e Casey s +atent and +ao Hn v Lau Ciu Long o 7ut this is not li)ely in friend or family cases such as 0e Mc'rd*e. o +oo*e example5 o 6ou may re,uest as)ing for help from someone is drowning. o 6ou rescue him and he promise to give you some reward o However, later he refused to pay. o /ost probably this past consideration promise to award after you rescue him! as a good one. o %st condition is satisfied as you rescue him as you hearing the "help# from promisor o However, it is unli)ely, when you save him, you are thin)ing there is remuneration. o Eo ;nd condition not satisfied.

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Which agreement to enforce then? "he first or second?

H5 Kption given the defendants, if called upon to fulfil their indemnity, to buy bac) the shares at @;.4& a share was itself a sufficient consideration for the promise of indemnity. <%st promise= 7ut their -ordships see great force in the contention. The defendants promised to indemnify he plaintiffs if the mar)et price of +u Chip shares fell below @;.4&. (so% it shou*d be second "romised to be enforced) .o&ever, in the event of the defendants being ca**ed on to im"*ement this "romise they &ere given an o"tion to ta2e u" the shares themse*ves at I6.>J. This on the face of it imposes on the plaintiffs in the circumstances envisaged an obligation to transfer the shares to the defendants at the price of @;.4& if called on to do so. The concomitant benefit to the defendants could be a real one - for example, if they thought that the mar)et, after a temporary set-bac), would recover to a price above @;.4&. (so it means that if D as2ed to enforced the first "romise% fo**o&ed by there is benefit for D a*so% then it is enforceab*e) !he fact that the o"tion is stated in the form of a "roviso does not "rec*ude it being a contractua* term or one under &hich consideration moves.

,ummary %. I re,uest that you perform an act or ma)e a particular promise!. ;. That re,uest carries with it an implied promise to pay the promise!. >. The implication of promise will be legally enforced if made in advance. D. The act is performed or re,uested promise made!. 4. There is a later express promise which fixes the amount of the reward reward promise!. o -ater express promise will be enforced and if the first promise to be enforced, then must made sure D had the benefit also o .ao Kn held that in that case, there is no terms and condition does not prevent which promise will be enforced

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'""*ication 'ac) wor)s into the night to complete an important report for his boss, -isa. -isa is very pleased with the report and says "I )now you#ve wor)ed very hard on this5 I#ll ma)e sure there#s an extra $;&& in your pay at the end of the month#. Can 'ac) enforce this promiseI This is a situation where prima facie -isa#s promise is unenforceable because 'ac)#s wor) is "past consideration#. Does the exception applyI .resumably the wor) was done at -isa#s re,uest, so the first of -ord Ecarman#s conditions is satisfied. 2as it anticipated by both parties that the wor) would be paid forI This is more difficult for 'ac). If he has simply wor)ed the extra hours on his own initiative, then his claim may well fall at this point. There would need to be some evidence that -isa was aware that he was wor)ing extra hours, and perhaps evidence of past practice in ma)ing "bonus# payments in this type of situation. 2hat about the third of -ord Ecarman#s conditionsI 2ould -isa#s promise be enforceable if it had been made in advance of 'ac)#s doing the wor)I The only problem for 'ac) here is whether what he is doing is simply part of his normal obligations as an employee. If it is then he may fall foul of the rules about existing obligations discussed above. If, he is doing more than his contract of employment obliges him to do, then this condition is met.

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Different Approach (for Justice)

De *a 1ere v +earson %0&1 +5 D newspaper company! advertise an info about free financial for reader. C read and sent to as) about it. They introduce a bro)er who had financial problem /isappropriate info given. H5 There is ctt. Kffer in newspaper. (cceptance by wrote to D Consideration not clearly mentioned. 7ut there is implied consideration mentioned that there is tendency to increase the sale of D#s newspaper <increase publicity by purchase the newspaper= /hite v 1*uett %14> +5 D indebted to his father D always complained to his father. +ather promised that he will release the liability of D#s debt also out of natural love and affection! if D stop complaining him. D did that. (fter father passed away, executor- defendant claim from D H5 (ction succeeded. There is no consideration by D Ceason5 D cease from complaining does not have economic va*ue. Commentary: /any cases involved no economic value such as 2ard v 7yham etc.

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Consideration in Eni*atera* offer Differ from condition and consideration 7etter approach in the Chappel Budgment below!

!homas v !homas also illustrates the difference between consideration and condition5 o the claimantNs remaining a widow was not "art of the consideration but a condition of her entitlement to enforce the executorsN promise. Eimilarly in Car*i** v Carbo*ic ,mo2e 1a** Co the claimant provided consideration for the defendantsN promise by using the smo)e-ballP but fact catching influenTa was only a condition of her entitlement to enforce that promise. 5n these cases% the "romisee can be said to have "erformed the condition. +erformance &as not re7uested by the "romisor. 2here the promiseeNs performance of the condition is or can reasonably be regarded as having been! so re,uested, it can constitute consideration 5 e.g. where ( promised 7 to convey a plot of land to 7 if 7 built a house on it, 7 could enforce the promise after he had built the house.

)dded by %oole These examples of conditions are very different in nature to the re,uirement to supply three chocolate wrappers in Chappell Co. -td v 8estle Co. -td The House of -ords reBected an argument to the effect that the wrappers were not part of the consideration but merely a condition for the supply of the record for Is ?d. -ord stated that The parties can choose what consideration they want. 5f he does something (a) and "ay money (b) in order to get the su""*y goods% then (a) and (b) &i** be regarded as consideration. In the case of conditional gifts there is no direct benefit to the re,uester from performance of the condition entitling the party to enforce the promise, e.g. catching influenTa or remaining a widow. 7ut if the Chappell v 8estle approach to the definition of consideration is adopted, i.e. if the consideration to support a promise consists of whatever has been re,uested in exchange by the promisor. Hn this basis catching inf*uenKa and remaining a &ido& &ou*d be "art of the consideration to su""ort the "romise rather than a condition or entit*ement to enforce it% since these acts are "art of the re7uested e$change.

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Car*i* Judgement <Consideration point= It has been argued that there is no consideration. 2e must apply to that argument the usual legal tests. -et us see whether there is no advantage to the defendants. It is said that the use of the ball is no advantage to them, and that &hat benefits them is the sa*eL and the case is put that a lot of these balls might be stolen, and that it would be no advantage to the defendants if the thief or other people used them. It is ,uite obvious that in the view of the advertisers a use by the public of their remedy, if they can only get the public to have confidence enough to use it, will react and produce a sale which is directly beneficial to them. !herefore% the advertisers get out of the use an advantage &hich is enough to constitute a consideration. 7ut there is another view. Does not the person who acts upon this advertisement and accepts the offer put himself to some inconvenience at the re,uest of the defendantsI 5s it to use this ba** three times dai*y for t&o &ee2s according to the directions at the re7uest of the advertiser go for nothing3 It appears to me that there is a distinct inconvenience% not to say a detriment% to any "erson &ho so uses the smo2e ba**. 5 thin2% therefore% that it is consideration enough that the "*aintiff too2 the troub*e of using the smo2e ba**.

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Summary
The doctrine of consideration is the means by which *nglish courts decide whether promises are enforceable. It generally re,uires the provision of some benefit to the promisor, or some detriment to the promisee, or both. The "value# of the consideration is irrelevant, however. The performance of existing obligations will generally not amount to good consideration, unless the obligation is under a contract with a third party, or the promisee does more than the existing obligation re,uires. This rule is less strictly applied following 2illiams v Coffey. .art payment of a debt can never in itself be good consideration for a promise to discharge the balance. Consideration must not be "past#, unless it was re,uested, was done in the mutual expectation of payment and is otherwise valid as consideration.

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