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Hint
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Answer
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Consideration involves both parties suffering a detriment and both parties gaining a benefit.
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Currie v Misa
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Consideration can either be _____ or executed. _____ consideration is where A makes a promise in return for a promise by B, both performed at a future time. Executed consideration is where A makes a promise in return for performance by B, and A's promise is only binding if B perform (unilateral offers)
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Executory
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Exam Technique: 1. Identify the consideration (benefit-detriment; executed/executory) 2. Explain the relevant ____ (e.g. past consideration) 3. Conclude whether consideration is valid or invalid |
rule
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x
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RULES OF CONSIDERATION
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x
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1. Sufficiency
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x
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Consideration must have value (i.e. it must be something). Consideration need not have monetary value, as long as it is of value.
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Chappel v Nestle
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Refraining from doing something you are not legally entitled to do is not sufficient consideration.
Additionally, consideration must have an objectively determinable value. A promise of love, e.g., is not enforceable because of its subjective and non-measurable nature. |
White v Bluett
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x
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2. Adequacy
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x
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The value of consideration provided by one party does not have to match what the other party is providing.
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Thomas v Thomas
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Hint
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Answer
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x
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x
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Any consideration that occurred before the promise was made cannot be considered valid consideration for that promise, as it was not given in exchange for the promise at the time it was made.
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Eastwood v Kenyon
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Past consideration will not be considered past consideration (and thus valid) if the following can be satisfied:
- The promisor requested the act
- There was an implied promise inherent in the request that the promisor will pay the promisee for the task |
Casey’s Patent
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x
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4. Performance of an Existing Duty
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x
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Generally, performance of an existing contractual duty will not be good consideration, UNLESS, either:
i) The party goes beyond their existing contractual obligations
Or
ii) The promisor receives a practical benefit or avoids a detriment |
Williams v Roffey Bros
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Performance of an existing duty can be valid consideration if the other party is not the person to whom your duty is owed, provided they also gain a benefit.
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Scotson v Pegg/Shadwell v Shadwell
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x
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5. Part Payment of a Debt
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x
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A creditor’s promise to accept part payment of a debt does not discharge the full debt UNLESS there is fresh consideration, such as payment at a different time or place OR through the doctrine of promissory estoppel.
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Pinnel’s case
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Hint
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Answer
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x
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6. Promissory Estoppel
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x
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Promissory estoppel prevents a party from going back on a promise that was made to another party, even when the promise was not supported by consideration, provided that the other party has relied on that promise to their _________.
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detriment
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Necessary components - ,
1. There must be a clear promise or assurance that the promisor will not enforce their strict legal rights.
2. The promisee must rely on the promise, altering their position based on the assurance. |
The High Trees Case
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Promissory estoppel can only be used as a defensive mechanism (a shield), not as a basis to bring a new claim (a sword).
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Combe v Combe
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The party invoking promissory estoppel must come with clean hands, meaning they must have acted fairly. If the promisee has acted unfairly or deceptively, the courts may refuse to apply promissory estoppel.
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Builders v Reels
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The effect of promissory estoppel is "suspensive", meaning it temporarily prevents a party from enforcing their strict legal rights for a certain period, but the legal rights themselves are not extinguished permanently. They are merely suspended or put on hold for as long as the court deems it fair.
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The High Trees Case
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x
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7. Consideration Must Move from the Promisee
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x
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A person cannot sue or be sued unless they have provided consideration.
Otherwise, it will simply be a gratuitous promise and not enforceable. |
Tweddle v Atkinson
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