Template_for_Consideration_and_Intention - Consideration Consideration is something that has value in the eyes of the law and given in exchange for

Template_for_Consideration_and_Intention -...

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Consideration Consideration is something that has value in the eyes of the law and given in exchange for another’s promise. Price for purchasing a promise. Conditions of Consideration (Pre-requisite). [only if the conditions are met then you can look at the criteria] With regards to the EXCHANGE of the promises between the parties, here are the conditions: 1. Benefit-Detriment Analysis It is required that the benefit conferred, or detriment suffered by the promisee must be requested by the promisor for it to be a valid consideration. As seen in the case of Chappell & Co Ltd Nestle Co Ltd (1960) , it was held that the wrappers are part of the consideration of the purchase of the records and not just a condition, as Nestle had indirectly benefited from the receipt of the 2 wrappers since its chocolate sales might have increased in connection with the promotion. Alternatively, the purchaser had suffered a detriment having been put the trouble of purchasing the chocolate bars in order to purchase the record. AND 2. Consideration must be requested by promisor The law states that benefit or detriment has to be requested by promisor in order to constitute valid consideration and be enforcecable by the promisor. As seen in the case of Combe v Combe (1951) , the plaintiff’s ex-husband had promised to pay her an annual maintenance of $100 after their divorce. Although she had, in reliance of her husband’s promise, refrained from applying to the court for maintenance, thus conferring a benefit , the court held that the ex-husband’s promise was not supported by any consideration because he had not requested for the consideration (to refrain). 3. Consideration move from the promisee The law states that a person can only enforce a promise if the consideration for the promise is furnished by him, as in the case of Tweddle V Atkinson (1861) , A married couple’s fathers entered into a contract to pay the young husband Tweddle a sum of money. The fathers later died, and the court held that Tweddle could not enforce the contract between the two fathers as no consideration flowed from him, and he was not a party to the contract. 4. The consideration provided must also not be a past consideration The general rule is that past consideration is not good consideration, as seen in Sim Tony v Lim Ah Ghee (1995): Sim, a public servant, referred Ah Ghee, an estate agent, to a person selling houses. Ah Ghee would get a commission from the sale of the houses and Sim regarded his assistance as gratuitous as this stage. Sim later alleged that there was a contract between Ah Ghee and him to share the commission. The court rejected Sim’s appeal and held that Sim had not done anything after the agreement to constitute fresh consideration . The rationale is that an act done prior to and independently of a promise cannot be regarded as valid consideration for the promise in question as it was not done in exchange for that promise.

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