Rules of Consideration
Rules of consideration
1. Consideration must not be past:
Re McArdle (1951) Ch 669 Court of Appeal
Majorie McArdle carried out certain improvements and repairs on a bungalow. The bungalow formed part of the estate of her husband's father who had died leaving the property to his wife for life and then on trust for Majorie's husband and his four siblings. After the work had been carried out the brothers and sisters signed a document stating in consideration of you carrying out the repairs we agree that the executors pay you £480 from the proceeds of sale. However, the payment was never made.
Held:
The promise to make payment came after the consideration had been performed therefore the promise to make payment was not binding. Past consideration is not valid.
Past consideration may be valid where it was proceeded by a request:
Lampleigh v Braithwaite [1615] EWHC KB J17
The defendant had killed a man and was due to be hung for murder. He asked the claimant to do everything in his power to obtain a pardon from the King. The claimant went to great efforts and managed to get the pardon requested. The defendant then promised to pay him £100 for his efforts but never paid up.
Held:
Whilst the promise to make payment came after the performance and was thus past consideration, the consideration was proceeded by a request from the defendant which meant the consideration was valid. The defendant was obliged to pay the claimant £100.
Bill of exchange
2. Consideration must be sufficient but need not be adequate:
There is no requirement that the consideration must be market value, providing something of value is given eg £1 given in exchange for a house would be valid. The courts are not concerned with whether the parties have made a good or bad bargain\
Chappel v Nestle [1960] AC 87 House of Lords
Nestle ran a sales promotion whereby if persons sent in 3 chocolate bar wrappers and a postal order for 1 shilling 6d they would be sent a record. Chappel owned the
1. Consideration must not be past:
Re McArdle (1951) Ch 669 Court of Appeal
Majorie McArdle carried out certain improvements and repairs on a bungalow. The bungalow formed part of the estate of her husband's father who had died leaving the property to his wife for life and then on trust for Majorie's husband and his four siblings. After the work had been carried out the brothers and sisters signed a document stating in consideration of you carrying out the repairs we agree that the executors pay you £480 from the proceeds of sale. However, the payment was never made.
Held:
The promise to make payment came after the consideration had been performed therefore the promise to make payment was not binding. Past consideration is not valid.
Past consideration may be valid where it was proceeded by a request:
Lampleigh v Braithwaite [1615] EWHC KB J17
The defendant had killed a man and was due to be hung for murder. He asked the claimant to do everything in his power to obtain a pardon from the King. The claimant went to great efforts and managed to get the pardon requested. The defendant then promised to pay him £100 for his efforts but never paid up.
Held:
Whilst the promise to make payment came after the performance and was thus past consideration, the consideration was proceeded by a request from the defendant which meant the consideration was valid. The defendant was obliged to pay the claimant £100.
Bill of exchange
2. Consideration must be sufficient but need not be adequate:
There is no requirement that the consideration must be market value, providing something of value is given eg £1 given in exchange for a house would be valid. The courts are not concerned with whether the parties have made a good or bad bargain\
Chappel v Nestle [1960] AC 87 House of Lords
Nestle ran a sales promotion whereby if persons sent in 3 chocolate bar wrappers and a postal order for 1 shilling 6d they would be sent a record. Chappel owned the