Consideration

Scenario 1 The 10 Bianca has agreed to pay Ben for his Rolls Royce is good consideration, as she has promised to pay him in return for his car. Ben might argue that 10 is a wholly inadequate sum of money for Bianca to pay in exchange for a Rolls Royce as it does not reflect the true value of the car. However, it was established in Chappel & Co Ltd v Nestle Co Ltd1 that consideration only needs to be sufficient not adequate. In Chappel & Co this dispute centred on whether Chocolate wrappers could form part of the consideration, it was held that they could as they were of value to the person providing them and were therefore sufficient consideration for the promise made. Thus whether or not consideration is sufficient is a subjective test, that is to say something will be good consideration if it is of value to the person giving it. The law is not concerned with whether the parties have made a bargain, and it will often be the case that two parties enter into a legally binding contract where one party provides consideration which may not appear to be an adequate exchange for what they will receive. There are limitations to this doctrine as merely doing something to entitle yourself to a gift will not provide sufficient consideration 2 , and nor will giving something you were not entitled to give . 3 Scenario 2 Although Pat has mowed Ann's law for her, which would normally qualify as consideration as she has suffered a detriment and Ann has received a benefit, consideration is not present here as consideration must not be past 4. That is to say that the act, which would normally amount to consideration, must not be performed before the promise is made. There is an exception to this rule, if the act was done at the promisor's request, the parties understood that the act was to be remunerated, and if payment would have been legally enforceable had the bargain been made in advance, then there may be consideration 5 . However, in this case although the payment would have been legally enforceable, had the bargain been made in advance, and the parties seem to understand that the act was to be remunerated, there is no evidence that Ann asked Pat to mow her lawn. Indeed Pat appears to have decided to do it herself, and therefore consideration is absent. Scenario 3 Had Ian agreed to accept a sum of less than the 1500 that John owed him then there would have been no new consideration for Ian's promise to accept less as it was held in Pinnels Case 6 that part payment of a debt does not constitute good consideration for an agreement to discharge the whole sum. However, by agreeing to accept John's car in satisfaction of the debt Ian has allowed John to vary the terms of their contract. Because John is now providing something other than the money that he owes Ian he has given good consideration for the debt that he owes 7 . It is not relevant that the car is worth less than the 1500 owed as the new contract is not for the repayment of a but is an exchange whereby John gives Ian the car in return for being released from the debt, in the new contract whether the consideration is adequate is not relevant so long as it is sufficient which in this case it clearly is.

Scenario 4 The general rule in this situation is given in the case of Stilk v Myrick 8 where it was held that performance of an existing duty does not amount to good consideration for a new promise. So on the face of it Lucy would not be entitled to the extra 10 for turning up on time, as being on time for work is something she is already contractually obliged to do. However, in Williams v Roffey 9 it was held that if a contract for goods or services was entered into, the promisor (Derek) had reason to believe that the promisee would not fulfil their obligations, the promisor offered an additional payment, and as a result of the promisee (Lucy) completing their existing obligations the promisor received a practical benefit or obviated a disbenefit, then the promise to pay extra will be enforceable with performance of the existing duty amount to good consideration. Here Lucy provided a service as a barmaid, Derek had reason to believe Lucy would not fulfil her obligations as she was consistently late and he offered her additional payment. He may also have obtained a benefit through the sale of a greater number of drinks, though on the facts this is not clear. As such consideration may be present, but equally may not be. Scenario 5 Generally speaking payment of a lesser some is not good satisfaction for the whole10 and as such Jake would be able to claim his wages for the two months and the future. However, Jake may be prevented from claiming his full wages for the two months under the doctrine of promissory estoppel even though Bill is bound to pay him the full amount under the contract. For promissory estoppel to operate five elements need to be present. There must have been; a clear and unambiguous to accept less, an intention to create legal relations, Bill must have altered his position in reliance on the promise, it must be inequitable for Jake not to be bound, and finally Jake must not have given notice of his intention to reassert his rights 11 . If Bill can show all these elements then he may be able to prevent Jake claiming back the money for the months, however as Jake has asked to be paid in full he has given notice of his intention to reassert his rights and therefore will be paid in full in the future as promissory estoppel acts to suspend rights not extinguish them .12
1. Chappel & Co Ltd v Nestle Co Ltd [1960] AC 87 [^ Return] 2. Carlill v The Carbolic Smoke Ball Co [1893] 1 QB 256, CA 21.7.3[^ Return] 3. White v Bluett. (1853) 23 LJ (Ex) 36[^ Return] 4. Roscorla v. Thomas, (1842) 3 QB 234[^ Return] 5. Pau On v Lau Yiu Long [1980] AC 614[^ Return] 6. Pinnels Case[1602] 77 ER 237[^ Return] 7. ibid.,[^ Return] 8. Stilk v Myrick. (1809) 2 Camp 317[^ Return] 9. Williams v Roffey Bros & Nicholls (Contractors) Ltd [1990] 2 WLR 1153[^ Return] 10. Pinnels Case[1602] 77 ER 237[^ Return] 11. See Central London Property Trust Ltd v High Trees Ltd [1947] KB 130, D& C Builders v

Rees [1966] 2 QB 617, and The Post Chaser 1982 1 ALL ER 27[^ Return] 12. D& C Builders v Rees [1966] 2 QB 617[^ Return]