Consideration must be sufficient enough to be recognised, but law will not enquire as to its adequacy Chappell v. Nestle[1960] AC: ‘commercial’ value. posting wrappers, benefited as required purchase
Thomas v. Thomas(1842): Motive and Consideration. Honouring motive to look after wife not enough.
Curie v misa: Compromises and forbearances. Priest gives man $500 to stop drinking and smoking, forbeared right to
Sundell v Yannoulatos(1955): Y demands more under existing contract. No consideration if X agrees
North Ocean Shipping v Hyundai Construction (The Atlantic Baron) [1979] QB: threat to break contract may amount to economic duress
Pao On v. Lau Yiu (1980): Duress is Coercion of will vitiating consent, illegitimate pressure required. Commercial pressure is not enough. Consider if:
Collins v. Godefroy (1831): Important law doesn't encourage public officials and administrators of justice to be influenced by promises of extra rewards for discharging their responsibilities
Glasbrook v. Glamorgan County Council [1925] A.C: when subject needs more protection and hasn't increased risk, shouldn’t have to pay. individuals who desire extra services should pay
5.2 Bound to another contract for same act
N.Z. Shipping v. Satterthwaite [1975] AC: law not concerned with whether it's a good deal
5.3 Agreement to pay more for same act
General Rule: No consideration if promise to perform existing duty to promisor
1) define obligation under contract 2) assess whether promisee has exceeded or received extra benefit 3) economic duress?
Stilk v. Myrick (1809) Sailors wouldn't get back on boats after delivery due to goldrush. Told they’d be payed more for continuing but weren’t. originally employed on the basis the would ‘do all that they could under all the emergencies’. Dissertation was such an emergency.
Wigan v Edwards (1973) ALR after contract to buy E became concerned about defects, gave list of them to W and said would not finalise contract until these were fixed. Got half done. Bona fide compromise
Hartley v. Ponsonby (1857) ER entitled to more so many sailors left trip was unsafe
Williams v Roffey (1991): must be a practical benefit. contracted to refurbish a block of 27 flats. contractor asked for more to do the same thing, agreed. practical benefit in avoiding expense of finding new contractor and paying fine for late completion. Risks fraud
* Musumeci v Winadell (1994): M had lease of fruit shop in D’s Shopping centre. D leased units to bigger competitor. P asked to renegotiate lease. D agrees to 1/3 rent reduction, but later terminates this. Consideration or revocable?
If A entered into a contract with B to do something for B in return for the payment by B
before A has performed obligations under contract B has reason to doubt completion
B thereupon promises A a concession in return for A's promise to perform this
a. as a result B obtains a benefit, or obviates a disbenefit provided that A's performance, is capable of being viewed by B as worth more to B than any likely remedy against A, OR
b. A suffers a detriment in foregoing the opportunity of not performing the original contract, in circumstances where performance is worth more than remedy
B's promise is not given as a result of economic duress, fraud, undue influence, undue pressure or unconscionable conduct
benefit to B or the detriment to A is capable of being consideration for B's promise
practical benefit: M was in a position to carry out lease obligations, despite bigger competitor, W avoided having a shopping Centre with empty Units [= benefit], Practical removal of threat of litigation and no element of extortion
Practical detriment: risking co-existence with competitor and forfeiting ability to risk breach
Coote: after Roffey its inconceivable that any agreement to vary contract would ever fail consideration. This risks exploitation, but protection will have to come from duress, fraud ect.
5.4 Agreement to pay less
Part payment of a debt or promise thereof is not good consideration (but peppercorn consideration is)
Pinnels Case (1602) if a debator owes creditor $100 and creditor agrees to accept $50 in satisfaction of the debt this agreement will not be binding.
Foakes v Beer (1884) AC: Instalments payed instead, beer then asked for interest. Upheld.
where a creditor is prepared to accept less a deed will be binding. Property Law Act 1974 s45 outlines formalities, s46 allows deed execution on behalf of a corporation
Promissory Estoppel
Better to rely on consideration as it doesn't have discretion and supplementary nature of equity
Riches v Hogben (approved in Giumelli): Estoppel principle applies not because of the promise (or contract would apply), but the expectation which it creates
Discretionary equitable doctrine
1. Shield
High Trees: In 1940 threats of bombing depressed market and rent was reduced. In 1945 landlord claimed arrears and full future rent. Where P has acted in reliance and it would be inequitable to allow D to go back on the promise. Denning: D estopped from asserting his strict legal rights under the contract.
Je Maintiendrai v. Quaglia (1980) SASR: Similar to High Trees: LL agreed to indefinitely lower rent, but claimed arrears on vacation. Held: promise operated for future and tenant suffered detriment
King CJ: must alter position on the faith of promise and suffer detriment (accumulation of debt). financial hardship and embarrassment if money spent elsewhere would have strengthened case.
White j: choosing to pay rent and relying on assurances a lesser rent would be accepted was an alteration of tenants position as he gave up opportunity to risk breach of contract
Legione v. Hateley (1983): should use cautiously in varying contractual rights and not create new rights
