Consideration: Existing Duties

[Flash Card 1 of 4]

Existing legal or public duty

• general rule: performance not consideration
• subpoenaed testify / not sufficient (Collins v Godefroy (1831))

Police

• reward for conviction people who broke into house / police officer claimed / was enforceable (England v Davidson (1840))
• US case / identify theives of jewels / not binding / public duty / not enforceable ( Gray v Martino (1918))

Exceeding duty

• coal mine / strike / police went beyond existing duty / sufficient (Glasbrook Bros v Glamorgan CC [1925])
• mother beyond legal duty / child choose where to live / sufficient for maintenance (Ward v Byham [1956]) / conflict White v Bluett: natural love and affection insufficient / public policy distinguishes
• wife deserted husband / he promised maintenance if she not pledge his credit / argued no consideration / held: sufficient she suspended her right to be maintained as could return (Williams v Williams [1957] )

Existing contractual duty owed to a third party

• general rule: can be good consideration
• D unload coal if P delivered / P contract with third party to deliver / P sued D for delay / enforceable (Scotson v Pegg (1861))
• P engaged (binding contract) / uncle promised money / marriage good consideration (Shadwell v Shadwell (1860))

bits of law

Consideration: Existing Duties

[Flash Card 2 of 4]

Existing contractual duty owed to the other party

• general rule: may not be good consideration
• crew had contract to complete voyage / 2 deserted / promised equal share of deserters wages / insufficient consideration (Stilk v Myrick (1809))
• ship faced danger / P promised extra pay if continued / held: insufficient / public policy sailors not demand more pay in emergency / today economic duress overcomes issue (Harris v Watson (1791))

Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991]

• D contract refurbish 27 flats with penalty clause for delay / D subcontracted P to do carpentry / P ran into financial difficulties / D promised extra per flat completed
• held: good consideration for extra pay / practical benefit to D not find new carpenters & not liable under penalty clause / Glidewell LJ:.. obtains in practice a benefit, or obviates a disbenefit...
• Purchas LJ: .. even though one party did not suffer a detriment this would not be fatal to the establishing of sufficient consideration...
• CoA explicitly stated does not overrule or contravene Stilk v Myrick (1809) / limit principle to situations where promisor secures no additional benefit / arguably D in Stilk gained practical benefit (not replace crew or incur delays) / to reconcile seems important no public policy issues in Williams
• practical decision: public interest for parties to renegotiate if no economic duress / arguably consideration no longer a key factor: businesses unlikely to promise additional payment unless believe beneficial / issue is whether any economic duress

bits of law

Consideration: Existing Duties

[Flash Card 3 of 4]

Exceeding obligations

• P had contract with D to work voyage / half crew deserted / D promised pay on completion / exceeded existing duty / entitled to renegotiate / sufficient consideration ( Hartley v Ponsonby (1857))

Part payment of debts

• general rule: part payment not good consideration for promise by creditor to forgo balance
• debtor already bound to pay full amount & performance of existing contractual duty owed to other not usually good consideration

Pinnel's Case (1602)

• D made part payment / before debt due / P accepted in satisfaction but later sued for balance / held: paying early was good consideration
• obiter: part payment never satisfy debt if no consideration / sufficient: early payment or additional goods (Lord Coke:.. a horse, hawk or robe...)
bits of law

Consideration: Existing Duties

[Flash Card 4 of 4]

Foakes v Beer (1884)

• P had court judgement for payment of debt against D / P agreed if D paid lump sum & additional 6 monthly payments (to pay debt in full within 5 yrs) / P would not take any proceedings whatever on the said judgment / D complied / P sued for interest
• held: P agreed not to sue on judgement at all (even for interest) / but D provided no good consideration
• HoL not bound Pinnel's Case / rule strictly obiter / but did feel constrained to apply / Earl of Selborne LC: .. I cannot think that your Lordships would do right, if you were now to reverse, as erroneous, a judgment of the Court of Appeal, proceeding upon a doctrine which has been accepted as part of the Law of England for 280 years...

Part payment of debts

Re Selectmove [1995]

• D owed tax / D in financial difficulties / paid £1000 monthly instalments repay arrears / Inland Revenue demanded full debt immediately
• D argued Williams v Roffey Bros principle should apply: if part payment of a debt confers practical benefit & freely accepted (no duress or fraud) / practical benefit is consideration
• held: no consideration / CoA constrained by Foakes v Beer (HoL)
• Gibson LJ: accepted force of the argument / but would leave Foakes v Beer no application: ..when a creditor and a debtor who are at arm's length reach agreement on the payment of a debt by instalments to accommodate the debtor, the creditor will no doubt always see a practical benefit to himself in so doing... / for HoL or Parliament to extend

bits of law