Legal Consideration in a Social Agreement

Contract is an agreement which can be enforced by law. It has been defined that a legally binding contracts need offer and acceptance in order to create a legal relation. Basically there is a need for a contract to be supported by consideration. In other words, in English law of contracts it is required that the parties bring something valuable in exchange for the promise that they have made in that agreement. Therefore a legal consideration converts a social agreement into a legal agreement. According to Lord Pollock’s definition, consideration is “An act or forbearance of one party, or the promise thereof, is the price for which the promise of the other is bought, and the promise thus given for value, is enforceable” (Graw, S 2008. pp 115). As Knight stated, “In simple, traditional terms consideration is provided when the promisee suffers a detriment or the promisor gains a benefit, making a binding contract”. He also believes that “Without consideration, there is only a gratuitous promise and gratuitous promises are unenforceable in contract law (without a deed)” (Knight).
The doctrine of consideration’s history is going back to the 16th century. Throughout the history, there have been many cases that helped in expansion and modification of the doctrine of consideration. This paper is going to study the traditional approach of the courts on the concept of consideration in contract law. This concept is going to be approached through the cases of Stilk v Myrick (1809) and Williams v Roffey Bros & Nichollas (1991), and Musumici v Winadell Pty Ltd (1994).

Stilk v Myrick (1809)
Stilk was to be paid 5 pounds per month during a voyage at sea. Two seamen abandoned and the Captain made an agreement that the wages of the two deserters would be divided equally among the rest of the crew if the two seamen could not be replaced at Gottenburgh. Myrick refused to honor the agreement so Stilk sued for his share of wages but the agreement wasn’t enforceable because

Cited: in: Carter et al, 1995, pp 7). Conclusion There are numbers of cases in contract law which demonstrates that the concept of consideration has been changed throughout the time. For instant the case of Stilk v Myrick (1809) states that if one of the parties does what they contractually are bounded to do, there is no consideration. In other words the performance of the pre-existing contract could not constitute consideration. However, the case of William v Roffey Brothers claims that there are more complex situations in commercial contracts. The court held that the case was economic duress and it brings the “practical benefit” to the doctrine of consideration. The development of the doctrine of consideration was necessary in order to get the commercial certainty in transactions. In 1991 the Australian court stated that the practical benefit may be found in every transaction and there might be practical benefits for the promise, but on the other hand, promisor could face unfair pressure and the practical benefit is not worth more than a remedy against the other party. It is important to note that for every agreement there are various number of elements to consider.