[1] ‘THE IDEA OF CONSIDERATION’ (2011) 61(2) The

1 Jill Poole
– Textbook on Contract Law (11th edn, Oxford Press) 120

2 Ibid 121

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3 Holdsworth WW, ‘Modern History of
the Doctrine of Consideration.’ (1922) 2(2) BU L Rev 88

4 A. W. B. Simpson, A History of the
Common Law of Contract: The Rise of the Action of Assumpsit, (Oxford Press
1975)

5 (1951) 2 K.B. 215

6 Henry
Winthrop Ballantine, ‘Mutuality and Consideration’ (1914) 28(2) Havard Law
Review 123

7 Dr Robert N Moles and Bibi Sangha
– Consideration: in Acceptance of Contract
10/12/2017

8 Peter Benson, ‘THE IDEA OF
CONSIDERATION’ (2011) 61(2) The University of Toronto Law Journal 242

9 ibid

10 Henry Winthrop Ballantine,
‘Mutuality and Consideration’ (1914) 28(2) Harvard Law Review 124

11Arthur T von Mehren, Civil Law
Analogues to Consideration’ (1959) 72 Harvard Law Review 1009

12(1842) 2
QB 851; 114 ER 330

13 Jill
Poole – Textbook on Contract Law (11th edn, Oxford Press) 127

14 Ewan McKendrick – Contract Law
(10th edn, Palgrave Macmillan, 2013) 75

15 ibid 76

16 Charles
Fried – Contract as Promise: A Theory of Contractual Obligation (revised edn,
Oxford Press, 2015) 29

17 ibid 30

18 (1809) 11 East 210; 103 E.R. 985

19 A S Burrows; Ewan McKendrick –
Cases and Materials on the law of Restitution (2nd edn, Oxford Press
2005) 14

20 (1934) A.C. 32

21 ibid

22 Arthur T von Mehren, Civil Law
Analogues to Consideration’ (1959) 72 Harvard Law Review 1009

23 Mark B Wessman, “Should We Fire
the Gatekeeper? An Examination of the Doctrine of Consideration” (1993) 48:1
University of Miami Law Review 46

24 Charlotte
Mary Boardman, “Considering Consideration: A Crtical And Comparative Analysis
of The Doctrine of Consideration in the Anglo- Canadian Common Law” (Master’s
Thesis, Universisty of British Colombia 2013) 75

25 ibid 79

26 (1972), 28 DLR (3d) 358 (B.C.S.C.)

27 ibid

28 ibid

29 (1842) 2 QB 851; 114 ER 330

30 ibid

31 Charlotte Mary Boardman, “Considering
Consideration: A Crtical And Comparative Analysis of The Doctrine of
Consideration in the Anglo- Canadian Common Law” (Master’s Thesis, Universisty
of British Colombia 2013) 81

32 ibid 80

33 Jill Poole – Textbook on Contract
Law (11th edn, Oxford Press) 152

34 (1877) 2 AC 439

35 ibid

36 Jill Poole – Textbook on Contract
Law (11th edn, Oxford Press) 129

37 Mark B
Wessman, “Should We Fire the Gatekeeper? An Examination of the Doctrine of
Consideration” (1993) 48:1 University of Miami Law Review 98

38(1980) 492 F. Supp. 294

39 ibid 303

40 ibid

41 Mark B Wessman, “Should We Fire
the Gatekeeper? An Examination of the Doctrine of Consideration” (1993) 48:1
University of Miami Law Review 99

 

 

 

 

 

In
view of the discussion above, it shall be useful to evaluate the actual value of
t

 

To
comment further on the convolutedness of the doctrine, one must remember that
to administer the application of consideration, certain conditons are to be met.
Hence it is important to deliberate how likely it is for these conditons to be
manipulated in such a manner, which may lead to an unjust outcome. Mark B
Wessman particularly highlighted this issue in relation to past consideration.
This concept defines contracts which allegedly exist based on an act followed
by a promise, and such a promise cannot be enforced by the courts.36 According
to Wessman it has come to appear that the doctrine of past consideration is
particularly exploited in a way so one can avoid establishing the actual making
of the alleged promise, the circumstances in which it was made, or the
existence of any past benefit- especially in cases where the promisor has
passed away.37
The misapplication of the rule can be detected in Tim W. Koerner & Associates, Inc. v. Aspen Labs, Inc,38 where the
court held that the ‘override’ agreement that was made between Aspen and Zimmer
to compensate the old distributors of Aspen that Zimmer had acquired was unenforceable
due to it being based on past consideration.39 But in actual
fact the distributors would indeed have the right to enforce the promise as
third-party beneficiaries. This was becaue as part of the attainment of Aspen
by Zimmer,  Zimmer had “promised to retain or pay Aspen’s old
distributors and the two parties intended to benefit the distributors”40-
hence the consideration that maintained the acquisition between the two, also consitutued
to support the promise for the benefit of the distributors.41 Portrayng
how having such

 

It
addition to this, promissory estoppel is another concept which adds to the
complexities of consideration as it theoretically undermines it. It was
developed to fundamentally enforce a promise where formal consideration absent.33 One can
argue that this equitable doctrine almost performs  the contrary to what consideration enforces-
rather than being restricted to a formal requirement, it allows the law to take
more accommodating approach in accordance to whatever case that is in
delieberation. This is demonstrated in the case of Hughes v Metropolitan Railway Co34 where the
courts intended to protect the tenant because it would be unreasonable for them
to fulfil the initial request of maintainance of the  premise, when in fact both parties were occuppied
in sale negotiations regarding it. Hence, it was inequitable to include the
time during the negotitions in the initial six months- the defendants relied on
this implied promise hence estoppel was applied, not finding them liable
despite the fact there was no consideration to support it.35 As one
can observe promissory estoppel has a rationale of its own and although
provides flexibility, can again bring unclarity in judicial decisions when the requirement
of concrete consideration is still in the legal picture.

 

Academics
have even went on to asses how consideration can be used as a ‘mask’ to
disguise the actual reasoning behind judicial decisions- such as morality based
fairness rather than objective legal anylsis.25 This is
illustrated in the case of Harding v
Harding,26 where
the court held that an agreement stating the husband could purchase the wife’s
share in their family home for just $1 was contractually invalid27 due to it
being ‘nominal’ consideration. Nonetheless the circumstances that accompanied
this agreement also favoured it to seem unfair, as the husband was seen to be
taking advantage of the wife’s vulnerable position whom had just returned from
eloping with another man, desperate to save her marriage.28 Hence
when looking at the facts it seems logical for the court to decide against the
enforcement of the promise. However contrasting this to a case previously
mentioned Thomas v Thomas,29
 in which the widow’s nominal rent of
£1 was held to be good consideraton30, comfirms
the court’s ability to apply the same doctrine in different ways to ensure a
fair judgement. One would presume the consequential result of leaving a widow
homeless in this instance highly contributed towards the outcome of the case.
And although this may seem advantageous for the doctrine, the non-uniformity
its application  possesses, can be
problematic by bringing ‘lack of trasparency
and uncertainty’31 into the legal system.32

 

Referring
to von Mehern’s appraisal mentioned above, describing the doctrine as “ambitious”22 one can
immediately note the adverse connotations the term emits. This could be
associated to the said convolutedness of the doctrine- nevertheless it is
exceptionally important to try devise the process of how consideration evolved
to appear so complex. Traditionally, the doctrine was said to have a ‘gatekeeping function’ where it ‘sorted promises into two classes- bargain
promises and gratuitous promises’23.
However academics have come to argue that because exceptions to the doctrine
have been established, it fails to be as uniformly applicable to every case,
which as a result has blurred its rules and its meaning.24

 

Moreover,
consideration is also afflictive as it can corroborate an appropriate measure
of relief if the promise is not consummated.16 Without
consideration- an explicit exchange said to be present, it would be extremely
difficult to decipher the degree of damages17 and the
outstanding compensation the plaintiff is owed when due performance of promise
fails to occur. In cases such as Rugg v
Minett18,
the payee’s right to retain the money that was given to them solely on the
terms of the contract performance was terminated. As a result, the claimants
could fully recover the original payment they gave for the casks. It was due to
the clearly stated, original consideration between the two that allowed the
unquestionable recovery of the price.19 This
principle can be further replicated in Fibrosa
Spolka Akcyjna v Fairbairn Lawson Barbour Ltd,20
where it was again, seeing the definite exchange between the two parties- that
stated the consideration, which allowed the claimants to receive their
restitution of £1000,21 Even
though the circumstances of this case were extensively different to the first,
the underlying idea that failure of consideration occurring allows fair reimbursement,
is ideally a highly important consequence to consider when analysing the
doctrine and its value wholly.

 

Professor
Arthur Taylor von Mehern went on to assess, “Consideration stands, doctrinally speaking, at the very center of the
common law’s approach to contract law. It represents an ambitious and sustained
effort to construct a general doctrine”11
This statement depicts a very well-rounded approach to consideration, but the
phrase to highlight here is the ‘sustained effort’ to execute the doctrine,
which can be demonstrated in many cases where consideration is given a pivotal
status of significance. An example of such is illustrated in the case of Thomas v Thomas, where the widow of Mr
Thomas was not allowed to stay in their residing house after his death as he
had not defined it to be permitted in his will. However, it was held that her
agreement to pay a minimal rent of £1 a year sufficed as good consideration,
therefore the resulting contract was valid and could be enforced.12 The
significance consideration the concept itself is given, is clearly illustrated
in this occurrence- although the payment may appear inadequate and minute
compared to normal commercial rents, in the eye of the law it is still seen as
sufficient. This very finely links to a set rule of the doctrine stating
consideration “must be sufficient but
need not be adequate.”13 The mere implementation of such a rule
reinforces how critical it is for an exchange of something to transpire- as it
allows both parties to acquire an obligation towards the agreement.14 Without
this, the transaction would simply be viewed as voluntary gift,15 hence
signifying how fundamental consideration is.

 

To
determine the relevant value of the doctrine, it is crucial to understand why
consideration is regarded with such importance and is sought to be needed in
contractual agreements. The basis of consideration exemplified the idea of
reciprocity in dealings between individuals6, relating
to the notion of a ‘quid pro quo’.7 Hence for
the first time ever providing a generic requirement to be fulfilled by
non-formal agreements in practice. As stated,
“without consideration, no promise was actionable in assumpsit”8
and it was this action-like attribute which would subliminally favour the
plaintiff’s interests and contribute towards its enforceability.9 Therefore
from the late sixteenth century, consideration itself ensured a somewhat
guaranteed liability which has now evolved to be perceived as ‘contractual’.10 

 

With
reference to relevant case law as well as legislation, this essay shall
consider the convolutedness of this doctrine to determine whether it should
remain an obligatory element. As well as determining its significance, to weigh
the possibility of its reform or utter eradication from contract law.

 

Consideration
has seen to be always regarded as an essential element to be present in the
formation of a legal contract. In its ultimate simplicity, consideration is
defined as “an act or a promise given in
exchange for a promise.”1
It is this cardinal component that allows the English Law to only enforce a
mutual bargain between parties rather than a said gratuitous promise from one
party to another.2
The concept of consideration itself is deeply rooted- the idea that a “nude pact was not enforceable” was
adopted very early on from the Roman Law3. It
evolved further becoming a central requirement of the action of assumpsit,
tracing back to the 14th century, it had persisted to be procedural
action that would be taken for the breach of a regular contract.4 However
there are certain principles that have been established to govern the doctrine
of consideration, to which some academics argue have complexified to an overly
elaborate degree over the years. Therefore, have come to enquire the
possibility of abolishing the necessity of the doctrine completely. Nonetheless
as Lord Denning in the judgment of Combe
v Combe eminently affirmed, “the
doctrine of consideration is too firmly fixed to be overthrown by a
side-wind.”5

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