Contract Law Consideration Quiz
45 Questions
10 Views

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to Lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What is the main function of consideration in a contract?

  • To ensure both parties understand their obligations
  • To establish the duration of the contract
  • To provide a basis for the enforcement of promises (correct)
  • To serve as a method for conflict resolution

Which of the following best describes the concept of reciprocity as it relates to consideration?

  • It requires a monetary exchange between parties
  • One party receives a benefit while the other suffers a loss
  • Contracts are only enforceable if both parties act simultaneously
  • Both parties give and receive something of value (correct)

In the context of contracts, what type of promise is established in an executory agreement?

  • A promise to perform an action in the future (correct)
  • A promise with no specified timeframe
  • A verbal agreement without consideration
  • A promise that has already been fulfilled

What distinguishes executed contracts from executory contracts?

<p>Executed contracts have all promises already fulfilled (D)</p> Signup and view all the answers

According to Lush J's definition, which of the following can constitute valuable consideration?

<p>A right or profit received by one party and a loss or responsibility undertaken by the other (D)</p> Signup and view all the answers

What is required for consideration to be valid?

<p>It must move from the promisee. (C)</p> Signup and view all the answers

Which of the following statements is true regarding past consideration?

<p>Past consideration is not valid consideration. (D)</p> Signup and view all the answers

Which element must consideration have?

<p>It must be of economic value. (A)</p> Signup and view all the answers

In the case of Tanner v Tanner, what did the court decide regarding consideration?

<p>Consideration was valid even without benefiting the promisor. (B)</p> Signup and view all the answers

What best describes a unilateral contract mentioned in the context?

<p>An agreement where only one party makes a promise. (B)</p> Signup and view all the answers

What happens if consideration does not move from the promisee?

<p>The contract is void. (A)</p> Signup and view all the answers

Which of the following is not a characteristic of valid consideration?

<p>Consideration must benefit the promisor. (B)</p> Signup and view all the answers

In contract law, what is a general rule regarding consideration?

<p>Consideration must be exchanged for the other party's consideration. (C)</p> Signup and view all the answers

What constitutes valid consideration in a promise not to sue?

<p>The promise where no detriment is suffered. (A), The promise made in return for an additional benefit. (B), The promise not made in return for an existing duty. (C)</p> Signup and view all the answers

Why is performing an existing legal duty not considered valid consideration?

<p>Because existing obligations do not impose a detriment. (A), Because it often involves no additional benefit. (B)</p> Signup and view all the answers

In the case Collins v Godferoy, what was the court's stance on the plaintiff's obligation?

<p>Providing evidence did not constitute consideration for payment. (B)</p> Signup and view all the answers

What did the court rule in Glassbrook Brothers Ltd v Glamorgan City Council regarding police duties?

<p>Providing extra services beyond the normal duties constitutes valid consideration. (D)</p> Signup and view all the answers

Which situation would provide valid consideration in a legal agreement?

<p>An individual taking actions beyond their legal duty. (D)</p> Signup and view all the answers

Which of the following scenarios describes a public duty that does not constitute consideration?

<p>A police officer arresting a suspect as per protocol. (B)</p> Signup and view all the answers

What must occur for a promise based on an existing duty to be considered valid?

<p>The individual must suffer some form of detriment. (B), The promise must involve additional compensation. (D)</p> Signup and view all the answers

What defines a situation in which consideration is valid due to excess performance beyond duty?

<p>When the performance is not legally required. (D)</p> Signup and view all the answers

What is considered a requirement for consideration to be valid?

<p>It should have some economic value (D)</p> Signup and view all the answers

In the case of Chappel v Nestle, why did the court find that the chocolate bar wrappers constituted consideration?

<p>They increased sales, providing value (C)</p> Signup and view all the answers

What was the court's reasoning in White v Bluett regarding the son's promise?

<p>It was too vague to be valid consideration (C)</p> Signup and view all the answers

In Thomas v Thomas, why was the plaintiff's claim about following her husband's wishes rejected?

<p>The court deemed there were no economic benefits (C)</p> Signup and view all the answers

What can be considered a valid form of consideration in a contract as demonstrated in Hammer v Sidaway?

<p>A promise not to enforce a legal claim (A)</p> Signup and view all the answers

What was the outcome of the case Alliance Bank Ltd v Broom concerning consideration?

<p>No consideration was given by either party (D)</p> Signup and view all the answers

What does Trietel's suggestion about consideration imply?

<p>Consideration should have at least economic value (B)</p> Signup and view all the answers

Which case highlighted the insufficiency of vague promises as consideration?

<p>White v Bluett (D)</p> Signup and view all the answers

What was the distinguishing factor in the case concerning the coal miners and police compared to Glassbrook?

<p>The police services in this case were self-induced. (D)</p> Signup and view all the answers

In Ward v Byham, what was the basis for the court's ruling regarding the father's promise to pay?

<p>The mother's efforts exceeded her legal duties. (A)</p> Signup and view all the answers

What was the outcome of the case Stilk v Myrick regarding the claims for extra payment?

<p>The court found no new consideration was given. (C)</p> Signup and view all the answers

In Hartley v Ponsonby, what led the court to decide that there was consideration for the promise of extra payment?

<p>The voyage was deemed dangerous, and sailors went beyond their original duties. (C)</p> Signup and view all the answers

Which statement is true regarding the enforceability of promises to pay for existing duties?

<p>They are not considered valid unless new consideration is provided. (D)</p> Signup and view all the answers

How did the court justify the mother's right to seek enforcement of the father's promise in Ward v Byham?

<p>There was no legal obligation on her part to maintain happiness. (B)</p> Signup and view all the answers

What factor differentiated Hartley v Ponsonby from Stilk v Myrick?

<p>The remaining sailors undertook greater risks than their original contracts required. (C)</p> Signup and view all the answers

What legal principle did the court apply when ruling in favor of the remaining sailors in Hartley v Ponsonby?

<p>Risk and additional obligation can represent new consideration. (A)</p> Signup and view all the answers

Under what condition can part-payment of a debt be accepted according to Pinnel’s case?

<p>The payment is made in a more convenient location (D)</p> Signup and view all the answers

What was the key ruling in Selectmove Ltd regarding the reliance on Williams v Roffey?

<p>Selectmove was denied the consideration claim. (B)</p> Signup and view all the answers

Which case supports the idea that a creditor who receives part-payment from a third party cannot sue for the remaining amount?

<p>Hiramchand Punamchand v Temple (D)</p> Signup and view all the answers

What is an example of a situation where disputed claims apply?

<p>The debtor has paid part of the amount and disputes the remaining debt. (D)</p> Signup and view all the answers

In Shadwell v Shadwell, what was considered valid consideration in the case?

<p>The financial burden of marrying the fiancée was deemed a detriment. (C)</p> Signup and view all the answers

In Scotson v Pegg, what was considered to be beneficial to the defendant?

<p>The delivery of coal (C)</p> Signup and view all the answers

What does Promissory Estoppel not support in relation to part-payment of a debt?

<p>It allows a debtor to renegotiate existing contracts. (A)</p> Signup and view all the answers

What is true about unliquidated claims in relation to part-payment?

<p>Part-payment can discharge the uncertainty of the debt. (C)</p> Signup and view all the answers

Flashcards

Consideration

Something of value exchanged between parties in a contract. It's the reason a promise is legally enforceable.

Executory Consideration

A promise to do something in the future, usually after the contract is formed. This is common in bilateral contracts where both parties make promises.

Executed Consideration

The promise has already been fulfilled. This usually happens before or at the time of contract formation.

Consideration Definition (Curie v Misa)

This classic definition emphasizes that consideration involves either a benefit to the promisor or a detriment to the promisee.

Signup and view all the flashcards

Consideration Definition (Dunlop v Selfridge)

This definition highlights the essence of consideration as the 'price' for which the other party's promise is bought.

Signup and view all the flashcards

Bilateral Contract

When one party's promise is made in exchange for the other party's promise, forming a two-way agreement.

Signup and view all the flashcards

Unilateral Contract

When one party makes a promise, and the other party accepts by performing an action.

Signup and view all the flashcards

Consideration Must Move from Promisee

Consideration must be given by the party who is receiving the promise.

Signup and view all the flashcards

Past Consideration is Not Good Consideration

Past actions or promises cannot be used as consideration for a new contract.

Signup and view all the flashcards

Consideration Must Be Sufficient, Not Adequate

The value of consideration does not need to be equal to the value of the promise, but it must be of some actual economic value.

Signup and view all the flashcards

Promise not to Sue as Consideration

Consideration can be a promise to do something in the future, or a promise not to do something.

Signup and view all the flashcards

Consideration Need Not Benefit Promisor

The consideration does not need to benefit the person making the promise, it only needs to move from the person receiving the promise.

Signup and view all the flashcards

Promise not to sue

A promise not to sue can be a good form of consideration. This means if someone has a valid claim against another party, they can agree not to pursue it in exchange for something else.

Signup and view all the flashcards

‘Economic value’ in consideration

In this case, the court determined that having a value that can be quantified is important, even if it doesn't have a precise monetary amount.

Signup and view all the flashcards

Chappel v Nestle - Chocolate Wrappers

Chocolate wrappers were sufficient consideration in this case because they contributed to Nestle's goal of selling more chocolate bars.

Signup and view all the flashcards

White v Bluett - Not complaining

The court decided that simply not complaining is not a valid consideration. This means it lacks any real value.

Signup and view all the flashcards

Thomas v Thomas - Following wishes

In this case, the court ruled that wishing to follow a husband's wishes doesn't have 'economic value' – it's not something that can be exchanged for something of monetary worth.

Signup and view all the flashcards

Combe v Combe - Not exercising right

This case demonstrates that a promise to do something might not be enough for good consideration. The wife's promise to not seek maintenance was considered too vague.

Signup and view all the flashcards

Alliance Bank Ltd v Broom - Implied promise

The bank argued that D provided no valuable consideration for extending the security. However, the court found an implied promise from the bank to D, making it good consideration.

Signup and view all the flashcards

Hammer v Sidaway (American case)

In this American case (not a legal precedent in the UK), a promise not to sue was considered good consideration. This shows that while there are some similarities, American law can differ from English law.

Signup and view all the flashcards

Existing Duty Rule

Performing an existing legal duty alone is not enough for consideration.

Signup and view all the flashcards

Going Above and Beyond

Even though the promisee is already obligated, if they go above and beyond their existing duty, that extra effort can serve as consideration.

Signup and view all the flashcards

Existing Public Duty Rule

A public official carrying out their legal duties (like a police officer keeping the peace) doesn't create consideration for a promise.

Signup and view all the flashcards

Performance of an Existing Duty

If a person is already legally bound to do something, their promise to do it again will not be considered good consideration for a new contract.

Signup and view all the flashcards

Collins v. Godferoy

In Collins v. Godferoy, a witness was legally obligated to testify. The court held that this existing duty wasn't enough for a payment promised by the defendant.

Signup and view all the flashcards

Glassbrook Brothers v. Glamorgan City Council

Companies who offered extra police services to ensure law and order went beyond their legal duty, and this effort constituted valid consideration.

Signup and view all the flashcards

Harris v Sheffield United Football Club

This case referenced Glassbrook, arguing that providing police presence at a football game was a necessary public duty, not extra consideration.

Signup and view all the flashcards

Pre-Existing Duty

It refers to the principle that a promise to do something you are already legally obliged to do does not create consideration for a new contract.

Signup and view all the flashcards

Existing Contractual Duty

A promise to carry out an existing contractual duty is not considered valid consideration because it does not provide anything new or valuable.

Signup and view all the flashcards

Stilk v Myrick (1809)

In this case, sailors were already contractually bound to sail to the Baltic and back. Their promise to continue sailing after two desertions was seen as fulfilling their pre-existing duty, not providing new consideration for extra payment.

Signup and view all the flashcards

Hartley v Ponsonby (1857)

This case sets a different standard. Here, sailors faced a drastically changed situation with the desertion of 17 out of 36 crew. Sailing to Bombay became dangerously risky. The remaining sailors' willingness to continue under these circumstances was considered a fresh promise, providing valid consideration.

Signup and view all the flashcards

Ward v Byham (1956)

This case differs from Glassbrook Bros. v Glamorgan County Council because the extra police presence was not requested but caused by the company's own actions, making them legally responsible for the costs.

Signup and view all the flashcards

Glassbrook Bros. Distinction

In Glassbrook Bros., police provided extra security at the request of a company during a strike. The company was not obligated to pay since they could have chosen not to request the service.

Signup and view all the flashcards

Ward v Byham - Consideration

In Ward v Byham, the father's promise to pay the mother was considered valid consideration because she was legally obligated to care for her child, but she went above and beyond by agreeing to ensure the child's happiness as requested.

Signup and view all the flashcards

The essence of consideration

It highlights that the promisor must receive something of value in exchange for the promise. This value can be a benefit or a detriment to the parties.

Signup and view all the flashcards

Exception to Existing Contractual Duty

It's crucial to understand that while existing contractual duty is generally not considered valid consideration, there are exceptions. The specific circumstances of each case need to be carefully assessed to determine if a new promise is supported by valid consideration.

Signup and view all the flashcards

Part Payment of Debt

A promise to forgo part of a debt is not binding unless consideration is provided.

Signup and view all the flashcards

Selectmove Ltd (1995)

In this case, the court ruled that Selectmove could not rely on the 'practical benefit' argument from Williams v Roffey because the Inland Revenue's benefit was not clear enough.

Signup and view all the flashcards

Exceptions to Pinnel's Case

Part-payment of debt can be accepted as consideration if the payment is made earlier, in a more convenient location, or the debtor provides something else in addition to the money.

Signup and view all the flashcards

Disputed Claims

When there is a genuine dispute about the amount owed, part payment can be considered good consideration for a promise not to sue.

Signup and view all the flashcards

Payment by a Third Party

In this case, a creditor who accepts part payment from a third party cannot later sue the debtor for the remaining amount.

Signup and view all the flashcards

Composition Agreements

A debtor who cannot pay all their debts may offer to pay a percentage of each creditor's claim.

Signup and view all the flashcards

Existing Contractual Duty to Third Party

A promise by a party to perform an existing contractual duty owed to a third party can be valid consideration for a new contract.

Signup and view all the flashcards

Shadwell v Shadwell (1860)

In this case, the court held marrying his fiancée was a detriment to the promisee and a benefit to the promisor, thus serving as valid consideration.

Signup and view all the flashcards

Study Notes

Consideration in Contracts

  • A contract is only legally enforceable if there is an intention to create legal relations (ITCLR) and consideration.
  • Consideration is the badge of enforceability in a contract.
  • The classic idea of consideration is based on reciprocity.
  • Consideration involves an exchange of promises between two parties.
  • Each party is both a promisor and a promisee.

Types of Consideration

  • Executory: A promise to do something in the future. This normally happens after the contract has been formed. Example: Contracting for a sale of good to be delivered.
  • Executed: A promise for doing something that has already been done. This normally happens before or at the time the contract is formed. Example: Returning a lost dog as advertised.

Rules of Consideration

  • Must move from the promisee: Consideration must originate with the person who is receiving the promise. However, it does not have to be given to the promisor.
  • Can be a promise not to sue: Forbearance to sue is valid consideration if a good faith argument exists.
  • Must be of economic value: Consideration must have some value in the eyes of the law. This doesn't require it to be equivalent, but it must have some economic value.
  • Past consideration is not good consideration: If an act is performed before a promise is made, that act is not valid consideration for the promise. However, there are exceptions—for example, if the act was done at the promisor's request and it was reasonably contemplated that payment would be made later for that action.

Exceptions to Past Consideration Rule

  • Lampleigh v Braithwaite: An act done at the promisor's request, where it is understood that payment will be made is valid consideration. The act must be done at the request of the promisor.
  • Re Casey Patents: The act must be reasonably contemplated that payment will be made at some point.

Sufficiency vs. Adequacy

  • Sufficiency: Consideration must have value in the eyes of the law. The court will not examine if the consideration is adequate.
  • Adequacy: The value need not be equivalent. The courts are not interested in whether the exchange is fair.

Existing Public Duty

  • Merely carrying out a public duty is not valid consideration. Example: a police officer carrying out their duties.
  • If the duty is exceeded, then it is good consideration.

Existing Contractual Duty

  • Performing an existing contractual duty to someone is not usually valid consideration.
  • Exceptions occur if something extra is given or if there is a practical benefit.
  • Examples of exceeding a duty: Stilk v Myrick, Hartley v Ponsonby, Williams v Roffey Bros

Contractual Duty to Supply Goods or Services

  • Williams v Roffey Bros: If an existing contractual duty is performed and confers a practical benefit on the other party, that can be valid consideration.

Practical Benefit

  • Courts look at practical benefits such as avoiding penalties, preventing trouble, or changing working arrangements.

Contractual Duty to Pay Debts

  • Pinnel's case: Part payment of a debt is generally not valid consideration for the full amount.
  • Exceptions: If the part payment is made at an earlier date or at a more convenient time or if the debtor provides something else. Foakes v Beer, Re Selectmove

Disputed Claims

  • If there's a dispute about the debt and the amount owed, part payment of the debt could be consideration for the promise not to sue.
  • Unliquidated claims: if the value is uncertain, part payment can be valid consideration.
  • Composition agreements: a debtor who cannot pay may offer a percentage of their claim to creditors.

Existing Contractual Duty to a Third Party

  • Performing a duty owed to a third party can be consideration.
  • Examples: Scotson v Pegg, Shadwell v Shadwell

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Quiz Team

Related Documents

Chapter 4: Consideration PDF

Description

Test your understanding of the function of consideration in contracts and the concept of reciprocity related to it. This quiz covers essential principles that govern contractual agreements.

More Like This

Contract Law Consideration
119 questions

Contract Law Consideration

Yugi avatar
Yugi
Contract Law: Consent and Consideration
31 questions

Contract Law: Consent and Consideration

EntrancingFigTree avatar
EntrancingFigTree
Contracts Law: Consideration Principles
48 questions

Contracts Law: Consideration Principles

GratifyingTaylor avatar
GratifyingTaylor
Consideration in Contract Law
8 questions

Consideration in Contract Law

ProblemFreePascal4018 avatar
ProblemFreePascal4018
Use Quizgecko on...
Browser
Open
Browser
Browser