This essay is asking the question whether the doctrine of consideration ought to be abolished. It will argue that all that should be required for a legally binding promise is a clear intention to be bound by the terms of a promise and, perhaps, detrimental reliance on that promise by the other party.
The Doctrine of Consideration is one of the three essential parts which make up a valid contract, the other two being that of offer and acceptance. In a contract, if consideration is not part of the contract then it will determine whether it is enforceable or not unless it's incorporated into a deed under a seal.
This particular requirement in terms of contract law has been put under much scrutiny recently and there have been calls for the abolition of the doctrine. In this essay we will take a look at the functions of consideration, it's purpose in modern law and the possible alternatives were it to be abolished.
Consideration is prone to much criticism as it is said to have a very narrow scope as a definition with many suggesting that the narrowness the doctrine shows is now more about denying legal effect in most promises. The thinking behind this criticism is that many courts bring consideration into cases without a second thought and use it as a tool to guide their judgements.
This then leads to it being open to many more avenues such as the Williams v Roffey case where they suggested that practical benefit counted as sufficient consideration. This then leads to unlawful claims as never before had consideration been brought into a pre-existing contract case.
Table of Contents
- Executory Consideration
- Executed Consideration
- Past consideration is not valid
- Consideration must be sufficient but need not be adequate
- Consideration as a performance of a legal duty
- Part payment of a debt
- Pre-existing contractual duty
- Is promissory estoppel a viable alternative to the doctrine of consideration?
- Limitations to Promissory Estoppel
- Promissory Estoppel is a shield not a sword
- Vitiating Factors
- The future of consideration?
Objectives and Key Themes
This essay examines the doctrine of consideration in contract law, exploring its functions, purpose in modern law, and potential alternatives if abolished. It analyzes criticisms of the doctrine's narrow scope and its application in various legal cases, highlighting its controversial nature and the need for reform or replacement.
- The definition and functions of consideration.
- Criticisms of the narrow scope of the doctrine of consideration and its implications.
- The application of consideration in different scenarios, such as pre-existing contractual duties and part payment of debts.
- Analysis of relevant case law to illustrate the complexities of consideration.
- Examination of promissory estoppel as a possible alternative to the doctrine of consideration.
Chapter Summaries
Executory Consideration: This section defines executory consideration as a reciprocal exchange of promises where each party's performance is a future obligation. An example is a contract for services where one party promises to perform services and the other promises payment upon completion. The consideration remains executory until one party fulfills their promise, transforming it into executed consideration. This concept underscores the fundamental exchange required for a valid contract, highlighting the reciprocal nature of contractual obligations.
Executed Consideration: Executed consideration refers to a situation where one party has already completed their performance under a contract. This completed performance constitutes the consideration. The essay illustrates this with hypothetical examples of agreements where one party's action is the consideration for the other party's promise. The completion of an act triggers the other party's obligation to perform their part of the bargain. This emphasizes the importance of performance as a valid form of consideration in contract formation.
Past consideration is not valid: This section explains the general rule that past consideration is not valid consideration. An act performed before a promise is made cannot be valid consideration for that promise. The essay, however, acknowledges exceptions such as situations involving prior requests or business contexts where an implied understanding of payment exists. Case law examples like Lampleigh v Braithwait and situations involving business dealings are used to delineate these exceptions, demonstrating the nuanced application of this rule.
Consideration must be sufficient but need not be adequate: This section explores the principle that consideration must be sufficient (something of value in the eyes of the law), but it doesn't need to be adequate (of equal value). The famous Chappell v Nestle case is analyzed, where chocolate bar wrappers were considered sufficient consideration despite their minimal intrinsic value. The section also examines cases like White v Bluett and Ward v Byham to illustrate how the sufficiency of consideration varies depending on the specifics of the agreement, revealing the legal complexities in determining what constitutes sufficient value.
Consideration as a performance of a legal duty: This section discusses the complex issue of whether performing a pre-existing legal duty constitutes valid consideration. The landmark case Collins v Godefroy is used to illustrate the general rule that performing a pre-existing legal duty is not good consideration. This section further emphasizes that this rule is subject to exceptions and is highly contextual, necessitating a nuanced approach when applied to specific legal circumstances.
Part payment of a debt: The discussion focuses on the principle that part payment of a debt does not generally constitute valid consideration for discharging the entire debt. The essay uses the key cases of Foakes v Beer and Pinnel's Case to illustrate this, highlighting the exceptions where the part payment is accompanied by additional consideration. The differing outcomes in these cases show the intricate application of legal principles regarding consideration and payment of debts.
Is promissory estoppel a viable alternative to the doctrine of consideration? This section will explore the concept of promissory estoppel as a potential alternative or supplement to the doctrine of consideration. It will discuss the circumstances under which promissory estoppel might be invoked and whether it can replace consideration entirely. This is likely to include discussion on the limitations and scope of promissory estoppel.
Limitations to Promissory Estoppel: This section delves into the limitations of promissory estoppel, contrasting its role as a shield rather than a sword. It clarifies the situations in which promissory estoppel can be successfully applied and the instances where it is not applicable, highlighting its boundaries and limitations in comparison to consideration.
Promissory Estoppel is a shield not a sword: This section reinforces the defensive nature of promissory estoppel, explaining its function as a defense against claims rather than as a basis for initiating a claim. This will contrast promissory estoppel with the more offensive role of consideration in contract formation and enforcement.
Vitiating Factors: This section likely discusses factors that might render a contract void or voidable, affecting the validity of consideration. It could cover issues such as misrepresentation, duress, undue influence or mistake. These factors can impact the effectiveness of a contract, regardless of whether consideration was present.
Keywords
Consideration, contract law, executory consideration, executed consideration, past consideration, sufficient consideration, adequate consideration, pre-existing duty, part payment of debt, promissory estoppel, Foakes v Beer, Pinnel's Case, Chappell v Nestle, Collins v Godefroy, Williams v Roffey, contractual remedies, legal obligation.
Frequently Asked Questions: A Comprehensive Guide to Consideration in Contract Law
What is this document about?
This document provides a comprehensive overview of the doctrine of consideration in contract law. It includes a table of contents, objectives and key themes, chapter summaries, and keywords. The focus is on the function, purpose, and potential alternatives to the doctrine of consideration in modern law. It analyzes criticisms of the doctrine and its application in various legal cases.
What are the key themes explored in this document?
The key themes include the definition and functions of consideration; criticisms of its narrow scope; its application in scenarios such as pre-existing contractual duties and part payment of debts; analysis of relevant case law; and an examination of promissory estoppel as a potential alternative.
What is executory consideration?
Executory consideration is a reciprocal exchange of promises where each party's performance is a future obligation. An example is a contract for services where one party promises services and the other promises payment upon completion. It remains executory until one party fulfills their promise.
What is executed consideration?
Executed consideration refers to a situation where one party has already completed their performance under a contract. This completed performance constitutes the consideration. The completion of an act triggers the other party's obligation.
Is past consideration valid?
Generally, past consideration is not valid. An act performed before a promise is made cannot be valid consideration for that promise. However, exceptions exist, such as situations involving prior requests or implied understandings of payment in business contexts.
What is the rule regarding the sufficiency of consideration?
Consideration must be sufficient (something of value in the eyes of the law), but it need not be adequate (of equal value). The Chappell v Nestle case illustrates this, where chocolate bar wrappers were deemed sufficient consideration despite their minimal intrinsic value.
Does performing a pre-existing legal duty constitute valid consideration?
Generally, performing a pre-existing legal duty is not good consideration (Collins v Godefroy). However, exceptions exist and the application is highly contextual.
Does part payment of a debt constitute valid consideration for discharging the entire debt?
No, part payment of a debt does not generally constitute valid consideration for discharging the entire debt (Foakes v Beer and Pinnel's Case). Exceptions exist where additional consideration is provided.
What is promissory estoppel and is it a viable alternative to consideration?
Promissory estoppel is explored as a potential alternative or supplement to the doctrine of consideration. The document discusses its circumstances of application and whether it can entirely replace consideration.
What are the limitations of promissory estoppel?
Promissory estoppel is primarily a shield, not a sword; it functions as a defense against claims rather than a basis for initiating a claim. Its application has limitations compared to consideration.
What are vitiating factors and how do they relate to consideration?
Vitiating factors, such as misrepresentation, duress, undue influence, or mistake, can render a contract void or voidable, impacting the validity of consideration regardless of its presence.
What are some key cases discussed in this document?
Key cases analyzed include Lampleigh v Braithwait, Chappell v Nestle, White v Bluett, Ward v Byham, Collins v Godefroy, Foakes v Beer, Pinnel's Case, and others. These cases highlight the complexities and nuances of the doctrine of consideration.
- Quote paper
- Ciaran Gallagher (Author), 2016, Should the "Doctrine of Consideration" be abolished?, Munich, GRIN Verlag, https://www.grin.com/document/317869
