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1、 Chapter3Consideration StudyGuide Explaintheneedforconsideration Analysethedoctrineofprivity Distinguishthepresumptionsrelatingtointentiontocreatelegalrelations Chapter3Consideration 1 Definition Itissomeright interest profitorbenefitaccruingtooneparty orsomeforbearance detriment lossorresponsibilit
2、ygiven sufferedorundertakenbytheother CurrievMisa Mostlegalsystemswillonlyenforcepromiseswherethereissomethingtoindicatethatthepromisorintendedtobebound Considerationisthenormal badgeofenforceability inEnglishlaw AtEnglishlaw acontractmustbe metwith or supportedby considerationtobeenforceable also o
3、nlyapersonwhohasprovidedconsiderationcanenforceacontract Inotherwords ifacontractcontainspromisesthatareunsupportedbyconsideration thenthecontractisvoidabinitio Example JohntoldSam WhenIbuyanewcar I llgiveyoumytruck JohnboughtanewcarbutdidnotgiveSamthetruck CouldSamsueforthetruck Why John spromiseto
4、giveSamthetruckisanunenforceablegratuitouspromise SamgavenothingtoJohninexchangeforJohn spromisetogiveSamthetruck 1 Typesofconsideration 2 Theconsiderationmustbeexecutoryorexecuted butnotpast a Executoryconsideration apromisegivenforapromise actsinthefuture b Executedconsideration apromiseisactually
5、executed inexchangeforanotherpromisetobeexecutedinthefuture anactinreturnforapromise c Pastconsideration apromisehasbeengivenorexecutedbeforeandindependentlytotheotherpromise Pastconsiderationisnotgoodconsideration ReMcArdle RulesaboutPastconsideration Generally apromisecannotbebaseduponconsideratio
6、nthatwasprovidedbeforethepromisewasmade EastwoodvKenyonReMcArdle 1951 ifthereisanexistingcontractandonepartymakesafurtherpromise nocontractwillarise Evenifsuchpromisedirectlyrelatedtothepreviousbargain Itwillbeheldtohavebeenmadeuponpastconsideration RoscorlavThomas1842 Exceptionsinthefollowing3circu
7、mstancepastconsiderationforapromisedoessufficetomakethepromisebinding Pastconsiderationissufficienttocreateliabilityonabillofexchange After6 or12 yearstherighttosueforrecoveryofadebtbecomestatutebarredbytheLimitationAct1980 If afterthatperiod thedebtormakeswrittenacknowledgementofthecreditor sclaim
8、theclaimisagainenforceableatlaw Requestforserviceswhichimplyliability LampleighvBraithwait Bothpartymusthaveassumedthroughouttheirnegotiationsthattheserviceswereultimatelytobepaidfor Recasey svPatents1892 EastwoodvKenyon theguardianofayounggirlraisedaloantoeducatethegirlandtoimprovehermarriageprospe
9、cts Afterhermarriage herhusbandpromisedtopayofftheloan Itwasheldthattheguardiancouldnotenforcethepromiseastakingouttheloantoraiseandeducatethegirlwaspastconsideration becauseitwascompletedbeforethehusbandpromisedtorepayit ReMcArdle 1951 Facts Awifeandherthreegrown upchildrenlivedtogetherinahouse The
10、wifeofoneofthechildrendidsomedecoratingandlaterthechildrenpromisedtopayher 488andtheysignedadocumenttothiseffect Itwasheldthatthepromisewasunenforceableasalltheworkhadbeendonebeforethepromisewasmadeandwasthereforepastconsideration RoscorlavThomas1842 Facts Roscorlaboughtahorsefor 30fromThomas Aftert
11、hepurchasewascompletedRoscorlasoughtanassurancefromThomasthatthehorsewasnotvicious Thomasgavethisassurance thehorsewashealthy ThehorseprovedviciousandtheCsuedforbreachofthepromise Itwasheld Becausethepromiseastothenatureofthehorsewasmadeafterthesale theChadgivennoconsiderationtoenforceittherewasnoco
12、ntractonwhichhecouldsue LampleighvBraithwait Fact TheDkilledsomeoneandthenaskedtheCtogetforhimapardon TheCdidsoathisownexpense TheDthenpromisedtopayC 100 Hefailedtopayitandwassued Held althoughC sconsiderationwaspast hehadgotthepardon D spromisetopaycouldbelinkedtoD searlierrequestandtreatedasoneagr
13、eement soitcouldbeimpliedatthetimeoftherequestthatCwouldbepaid Recasey svPatents1892 Facts AandBownedapatentandCwasthemanagerwhohadworkedonitfortwoyears AandBthenpromisedCaone thirdshareintheinventionforhishelpindevelopingit ThepatentsweretransferredtoCbutAandBthenclaimedtheirreturn Held TheCcouldre
14、lyontheagreement EventhoughC sconsiderationwasinthepast ithadbeendoneinabusinesssituation attherequestofAandBanditwasunderstoodbybothsidesthatCwouldbepaidandthesubsequentpromisetopaymerelyfixedtheamount Conditions Mustbedoneatthepromisor srequestPartiesunderstandthattheactwastoberewardedPaymentmusth
15、avebeenlegallyenforceablehaditbeenpromisedinadvance 3 Rulesofconsideration Thereareanumberofcomplicatedrulesgoverningconsideration allofwhichhaveexceptions Eachruleanditsexceptionisdealtwithbelow a Considerationmustbelegal b Considerationmustmovefromtheofferee butnotnecessarilytotheofferor c Conside
16、rationneednotbeadequate butmustbesufficient d Considerationmustnotbeillusory Considerationmustbepossible e Considerationmustbecurrent itcannotbepast f Thirdpartyobligationisgoodconsideration g Performanceofapubliclawdutyisnotgoodconsideration b Considerationmustmovefromtheofferee butnotnecessarilytotheofferor Theoffereemustprovideconsideration althoughtheconsiderationdoesnothavetoflowtotheofferor Iftherearejointofferees thenconsiderationneedonlytomovefromoneoftheofferees seeTweddlevAtkinson Pric
