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Contract | Formation

Consideration: Overview

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Consideration: Overview

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  • general principle: agreement alone not enforceable contract / need consideration / except: deed
  • traditional approach: .. right, interest, profit or benefit accruing to the party or some forbearance, detriment, loss or responsibility, given, suffered or undertaken... (Currie v Misa (1875))
  • Dunedin: Sir Frederick Pollock .. 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... (Dunlop Pneumatic Tyre Co. v Selfridge [1915])

Adequacy and sufficiency

  • consideration: need not be adequate (reflect value) / but must be sufficient (legally capable)
  • insufficient: love & affection (Bret v JS (1600))
  • sufficient: widow / house £1 & good repair (Thomas v Thomas (1842))
  • majority: wrappers were part of consideration / despite trivial economic value & thrown away / Somervell: ..a peppercorn does not cease to be good consideration if it is established that the promisee does not like pepper and will throw away the corn... / Simonds & Keith (dissenting): qualifying condition (Chappell & Co. v Nestle Co. [1960])

Forbearance from legal conduct

  • insufficient: stop complaining / write off son's debt (White v Bluett (1853))
  • sufficient: US / refrain drinking & gambling / $5000 / limit legal freedom (Hamer v Sidway (1891))
bits of law
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