Law: Contract and Consideration Essay

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Aspects of Contract and Negligence
Unit 5
HNC/HND in Business

Consideration and Intention in Contract

Assignment Task

Consideration must be something of value in the eyes of the law. A one sided promise which is not supported by consideration is a gift. The law does not enforce gifts unless they are made by deed.

Referring to the case of Currie v Misa (1875) LR 10 Ex 15 definition of consideration is: “A valuable consideration in the sense of the law may consist either in some rig3 ht, interest, profit or benefit accruing to one party, or some forbearance, detriment, loss or responsibility given suffered or undertaken by the other.”

Rules of consideration

1. Adequacy
Consideration must be sufficient but need not be adequate.
There is no requirement that the consideration must be market value. The courts are not concerned with whether the parties have made a good or bad bargain.

2. Past consideration
Consideration must not be past. Consideration can be provided in the present or the future.

3. Privity of Contract
“A doctrine of contract law that prevents any person from seeking the enforcement of a contract, or suing on its terms, unless they are a party to that contract.” http://www.duhaime.org/LegalDictionary/P/PrivityofContract.aspx 23 December 2014

4. Part payment of a Debt
Part payment of a debt is not valid consideration but there are some exceptions:
a) Before the due date
b) At different place
c) Using something instead money (chattel)

5. Promisory Estoppel
“A promise made to another party to a contract that the contract will not be enforced in whole or in part and which, once acted upon, prevents subsequent proceedings to enforce the contract as against the person who relied on the promise” http://www.duhaime.org/LegalDictionary/P/PromissoryEstoppel.aspx 23 December 2014

6. Performance of a pre-existing duty
If one party in under a duty to do something in already existed agreement, this cannot be used as a valid consideration in contract.

In the Bob and Rupert’s case there was good consideration in general. Bob offered a stamp and Rupert offered money in exchange of that item. All the rules of consideration was achieved.
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