Contract Handout 3 - Consideration

Consideration is something of value exchanged between parties that makes a promise legally binding.

A gratuitous promise is not enforceable by law because it lacks consideration, as nothing is exchanged for it.

Executory consideration involves promises exchanged before completion, while executed consideration occurs when an act is performed in return for a promise.

<p>If consideration is given before the agreement, it is classified as past consideration and is ineffective for forming a contract.</p> Signup and view all the answers

<p>Contracts under seal do not require consideration to be enforceable, recognizing the formality of the agreement.</p> Signup and view all the answers

<p>No, a promise to provide something for nothing cannot be enforced because it lacks consideration.</p> Signup and view all the answers

<p>A binding contract requires that both parties provide something of value, establishing mutual consideration.</p> Signup and view all the answers

<p>Past consideration refers to a benefit given or a detriment suffered before a contract is made, which does not constitute valid consideration.</p> Signup and view all the answers

<p>The claim must be reasonable, the promisee must believe it might succeed, and they must not conceal any affecting facts from the promisor.</p> Signup and view all the answers

<p>A person under public duty does not provide good consideration by merely fulfilling that duty because they are obligated to do so by law.</p> Signup and view all the answers

<p>When the promisee does more than what is expected in the bare discharge of their public duty.</p> Signup and view all the answers

<p>According to Pollock, if a promisee is merely doing something they are already bound to do, it does not constitute good consideration.</p> Signup and view all the answers

<p>The areas include public duty, existing contractual duty to the promisor, existing contractual duty to a third party, and composition with creditors.</p> Signup and view all the answers

<p>Because fulfilling an existing contractual obligation does not provide new value or consideration to the contract.</p> Signup and view all the answers

<p>An existing duty to a third party also fails to constitute good consideration if the promisee merely promises to perform it.</p> Signup and view all the answers

<p>A vexatious claim is unreasonable and without merit, whereas a reasonable claim has a legitimate chance of success.</p> Signup and view all the answers

<p>It ensures the promisee suffers some detriment at the request of the promisor, regardless of whether any benefit is received by the promisor.</p> Signup and view all the answers

<p>Courts do not concern themselves with the relative value of consideration, allowing agreements to be enforced even if one party benefits more than the other.</p> Signup and view all the answers

<p>It cannot be valued in monetary terms and does not involve a tangible detriment or benefit.</p> Signup and view all the answers

<p>The court upheld the agreement, recognizing the nephew's refraining from legal rights as sufficient detriment, constituting adequate consideration.</p> Signup and view all the answers

<p>It refers to agreements that are so one-sided that they shock the conscience, prompting courts to examine the adequacy of consideration.</p> Signup and view all the answers

<p>It shows that promises based solely on natural love and affection lack sufficient value to constitute good consideration.</p> Signup and view all the answers

<p>He asserted that if a bargain is done in good faith, the courts will not closely examine its depth or fairness.</p> Signup and view all the answers

<p>Even transactions that appear to hold no value can still be recognized as good consideration if deemed adequate by the courts.</p> Signup and view all the answers

<p>The primary issue was whether the practical benefit obtained by B could serve as valid consideration for B's promise to A.</p> Signup and view all the answers

<p>Williams v Roffey recognized practical benefit as consideration, whereas Stilk v Myrick did not uphold additional promises as valid consideration under similar circumstances.</p> Signup and view all the answers

<p>The promise must result in a practical benefit for B and must not be given under economic duress or fraud from A.</p> Signup and view all the answers

<p>The economic duress doctrine allows parties to be released from a contract if they were coerced into it under the threat of serious financial loss.</p> Signup and view all the answers

<p>The cases of Harris v Watson and Stilk v Myrick were contrasted with Williams v Roffey to illustrate changing interpretations of consideration.</p> Signup and view all the answers

<p>The court found that the sailors had provided good consideration by performing more than what was expected in their original contract.</p> Signup and view all the answers

<p>The ruling impacted future decisions by allowing for practical benefits to be seen as valid consideration, affecting the rigidity of contract law.</p> Signup and view all the answers

<p>It followed Williams v Roffey by adopting the principle that practical benefits could constitute consideration in contract agreements.</p> Signup and view all the answers

<p>All creditors must agree together to accept the lesser sum.</p> Signup and view all the answers

<p>The rule in Pinnel's Case applies, which means composition with creditors does not apply.</p> Signup and view all the answers

<p>It prevents fraud on other creditors by ensuring fairness in the arrangement.</p> Signup and view all the answers

<p>A cannot sue X for the remaining balance, as it creates a fraudulent situation against Y.</p> Signup and view all the answers

<p>When the promisee promises to perform an obligation they are contractually bound to fulfill.</p> Signup and view all the answers

<p>The general rule is that the promisee is providing good consideration.</p> Signup and view all the answers

<p>The courts recognize the promisee's performance as valid consideration.</p> Signup and view all the answers

<p>The rule states that payment of a lesser sum is no satisfaction of the debt.</p> Signup and view all the answers

<p>Courts will not allow actions that undermine the agreements made with third parties.</p> Signup and view all the answers

<p>A lesser sum can satisfy a debt if a new element is introduced at the request of the creditor.</p> Signup and view all the answers

<p>Williams v Roffey Bros applies only when services are rendered for an additional payment, not for accepting a lesser amount in satisfaction of a debt.</p> Signup and view all the answers

<p>Payment by promissory notes constitutes a different means of payment, while payment by cheque does not.</p> Signup and view all the answers

<p>The introduction of a new element means the debtor's lesser payment can fully satisfy the debt.</p> Signup and view all the answers

<p>Because the rule specifies that a creditor cannot accept a lesser amount of money as satisfaction for a debt.</p> Signup and view all the answers

<p>Promissory estoppel serves as an important exception to the rule by enforcing a promise even without consideration.</p> Signup and view all the answers

<p>Composition with creditors refers to an agreement whereby creditors accept a lesser amount in full satisfaction of debts.</p> Signup and view all the answers