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Consideration

Something of value in the eye of the law Thomas v Thomas.

Benefit to the promisor, or detriment to the promise Currie v Misa.

1. Consideration must move from the promisee

ie not from 3P - Tweddle v Atkinson.

2. Consideration need not move to the promisor

Can exist where promisee suffers some detriment at promisors request even though no direct
benefit is conferred on the promisor Tanner v Tanner.

3. Past consideration is not good consideration

Re McArdle. Subject to requested performance exception. As identified by Lord Scarman in Pao On v


Lau Yiu Lang: a) Act must have been done at request of promisor (Lampleigh v Braithwaite); b) Parties
must have understood act would be remunerated (Re Caseys Patents); c) Payment, if it had been
promised in advance, must have been legally enforceable.

4. Consideration must be sufficient but need not be adequate

Mountford v Scott: 1 to secure option to purchase property was sufficient.

Chappel & Co. Ltd v Nestle Co. Ltd: chocolate bars part of consideration. De La Bere C allowing
newspaper to print letter (invented consideration).

Consideration not sufficient:

Moral obligation, love, affection White v Bluett (promise not to nag).

Existing duties imposed by law Collins v Godefroy. But exceeding ones duty can be consideration
Glasbrook Bros.

Existing contractual duty Stilk v Myrick (party promising additional payment gets no benefit)
Exceeding this duty can be consideration Hartley v Ponsonby.

Williams v Roffey Bros: can be consideration where:

A enters into contract with B to do work or supply goods and services in return for payment
At some time before A has completely performed promise, D has reason to doubt whether A
will complete his side of the deal
B therefore promises A an additional sum
B obtains a practical benefit through this
Bs promise is not given under duress
Confined to goods & services by Foakes v Beer. Not relevant for part payment of debt: Re Selectmove.

Existing duties owed to 3P can be consideration: Scotson v Pegg, supported by The Eurymedon.

Part Payment of debts

Generally, part payment of debts is not good consideration Pinnels Case (followed by Foakes v
Beer). But debtor may furnish good consideration for creditors promise to accept lesser sum by:

1) Paying less before due date or at a different place at creditors request; or


2) Paying less and making a payment in kind (eg Lord Cokes gift of a horse, hawk or robe).
New element must give independent benefit to creditor Vanbergen v St Edmunds Properties Ltd.

Cheque is not good consideration for less if used merely as substitute for cash D&C Builders Ltd v
Rees.

Common law rules will not apply if:

A. Disputed debts: if sum uncertain and less is accepted, that is binding. Pinnels Case wont apply.

B. Payment of debts by 3P (Welby v Drake) would be fraud on 3P to sue other for full sum.

C. Where several creditors accept less from same person.

Promissory Estoppel

From Denning Js decision in High Trees, based on Hughes v Metropolitan Railway Co: A promise to
accept a smaller sum in discharge of a larger sum, if acted upon, is binding notwithstanding the
absence of consideration. 4 requirements to established defence of promissory estoppel:

1. Promise not to insist on PORs strict legal rights must be clear and unequivocal wasnt in
Nigerian Produce Marketing. Promise may be implied from words or conduct (Hughes). Need not be
express.

2. It must be inequitable for POR to renege on his promise

D & C Builders No promissory estoppel as creditors promise to accept 300 in full satisfaction had
been extorted from him by economic duress.

3. PEE must have changed his position in reliance upon the promise

Established in Alan & Co. Ltd. Detriment is not necessary Goff J in Societe Italo-Belge.

4. Promissory operates only by way of defence


Combe v Combe PE can only be used to vary an existing relationship, not to bring one into existence
in the 1st place.

PE usually merely suspends rights. Does not extinguish them unless impossible for PEE to resume
original position. POR may revive his suspended rights by giving reasonable notice which need not be
formal Tool Metal Manufacturing.

[High Trees Denning suggested PE can extinguish rights. Said same obiter in D & C Builders. ]

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