W4. Consideration.pptx - BUSINESS LAW MMPA 503 SESSION FOUR...

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BUSINESS LAW: MMPA 503 SESSION FOUR
REVISION QUESTION Emma offers to sell Jim her car for $1500. Jim declines. Jane overhears the conversation and says to Emma “I accept your offer”. Jim immediately says “On second thoughts I will accept after all.” Advise Emma.
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SESSIONS FOUR COVERAGE AND READINGS Coverage Consideration Problem Solving Method: explanation and practice Intro to vitiating elements Targeted Readings Hubbard: Chapters 5, pp 110- 118; Chapter 6 & Chapter 7 Feehily: Chapter 5, pp 123-125, 129-133
RECAP THREE ELEMENTS REQUIRED FOR A COURT TO ENFORCE A SIMPLE CONTRACT ARE: Intention that the agreement is to be legally binding offer and acceptance consideration
WHAT IS CONSIDERATION? At common law, a promisor is not bound to perform a promise unless it was either made in the form of a deed or the promisor received some consideration in return. Per Pollock (in Pollock on Contracts, 13th ed., p. 133) “ Consideration: the act or forbearance of one party, or the promise thereof is the price for which the promise is bought. The promise thus given for value is enforceable.” So, what is forbearance: detriment /agreeing not to do something that legally entitled to do or agreeing not to enforce a legal right
THAT THE PROMISEE SUFFERS A DETRIMENT ( HAMER V SIDWAY) The nephew promises in return to give up something he is legally entitled to do (suffers a detriment). The uncle promises to pay the nephew $1000. The uncle’s promise, supported by consideration, is enforceable. Agreed Uncle! Nephew, I will give you a $1000 if you do not smoke for a year!
CONSIDERATION=THE “PRICE OF THE PROMISE” Can be an act Or forbearance Or the promise thereof Price: not just money Example 3: Consider I will give you $100 I will give you $100 if you clean my car The promise to clean the car is good consideration for my promise to pay $100
THE CATEGORIES OF CONSIDERATION Slide 8 Executory Good Consideration Executed Good consideration Past Bad consideration, but exceptions
The promise to pay the $5000 is executory consideration, this is, it still has to be done. Slide 9 EXECUTORY CONSIDERATION Agreed I will give you $5000 for your car.
Acceptance of this offer is by finding and returning the dog. EXECUTED CONSIDERATION LOST A SMALL DOG $100 Reward
PAST CONSIDERATION Where a promise is made: in return for an act that has already been performed, or for benefit that has already been received, Then the consideration for the promise is said to be past and will not support the promise; i.e. the promise in return for past consideration is unenforceable.
PAST CONSIDERATION: CONTINUED But if work done by B at the express request of A in circumstances that imply that B is to be rewarded by A, then A’s subsequent promise to pay merely quantifies the original promise and the promise to pay is enforceable Compare: Hunt v Bale case Sydenham v Worlington
OTHER RULES ABOUT CONSIDERATION?

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