288615_CHAP 3 - Consideration (L3 - lecture version).pptx

A forbearance to exercise a legal right is good

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A forbearance to exercise a legal right is good consideration. Forbearance involves the forgoing of the exercise of a legal right. Forbearance may be express or may be implied from the circumstances. Forbearance can be inferred from surrounding circumstances. Section 2 (d) make it clear that the act of forbearance or promise is consideration provided it is done at the desire of the promisor. 20
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5. Mutual Promise
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Consideration may also contain mutual promises, i.e., a promise made by one party in return for a promise made by the other. In K Murugesu v Nadarajah , appellant’s counsel submitted that there was no consideration for the offer to sell and that the agreement was void. The Federal Court dismissed the appeal. Chang Min Tat FJ stated: “The answer to the appellant's contention lies in illustration (a) to s 24 of the Contracts Act, 1950 … This particular illustration is in these words: (a) A agrees to sell his house to B for $10,000. Here, B's promise to pay the sum of $10,000 is the consideration for A's promise to sell the house, and A's promise to sell the house is the consideration for B's promise to pay the $10,000 . These are lawful considerations.” i.e. The promise itself is a valid consideration. 22
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Continue… The agreement must be seen to be a case of executory consideration. A promise is made by one party in return for a promise made by the other; in such a case each promise is the consideration for the other. "A promise made without a consideration is void. But where there is a promise against a promise, one promise is consideration of the other because each may have his action against the other for nonperformance" per Holt C.J. in Harrison v Cage (1698) 12 Mod 214. The rule that consideration can consist of mutual promises is now too well established to be questioned. ” at 83. 23
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Continue… The concept of mutual promises is incorporated in the Contracts Act in s 2(f) on reciprocal promises which provides that "promises which form the consideration or part of the consideration for each other are called reciprocal promises". Sections 52-55 provide for the performance of reciprocal promises.
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6. Consideration from promisee or any other person
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Under the common law, consideration must move from the promisee. In Tweddle v Atkinson [1861] 1 B & S 393 after the wedding of H and D, both their fathers, X and Y entered into an agreement that they will pay H a certain sum of money. After the death of X and Y, H took an action against the respective estate for the money. The action failed. The Court held that H cannot enforce the agreement as he did not provide any consideration. The agreement was between X and Y who provided the consideration. In Malaysia, the position is different from the common law as s 2(d) of the Contracts Act provides that "when, at the desire of the promisor, the promisee or any other person has done .... ".
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  • Fall '17
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  • The Land, ﹡The Court

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