MLL111 Lecture Notes - Lecture 3: Chappell & Co., Extortion, Contract
14 Aug 2018
School
Department
Course
Professor
Week 3
Consideration
*The price you pay for the promise *anything valued by the promisor
Distingusih between legal and moral obligations
Courts says you don’t have enough
Person recievign the promise has to give something in return
Cpnsideration is always from the promise.
2 potential traps
1)Inaccurately analysing who provides the consideration
For a bilateral contract both parties are responsible for a consideration
2)Its flexible (makes it easy)
3)No set rules which make it both easy and hard
Issues in consideration
1)when a promise is not fulfilled
2)Promisee seeking to enforce the promise showing that the promise is contractual
3)The promisor is seeking an excuse for non-performance eg:carlill
In carlill your promise to use/act of using the smokeball was a good consideration.
Times when you don’t need consideration
1)when the promise is in a deed (under seal)
Simple contract – contract not under seal which NEED consideration
(Deed eg: letters of credit from banks , deed poll – changing your name etc.)
When consideration fails, no contract , therefore no contract law , then
estoppel steps in.
1)Matt and George are both promises and promisors because this a bilateral contract.
2)consideration by matt is the promise of the oven, by George it’s the promise of the money
*Consideration doesn’t have to be money (anything valueable , a promise to do /not to do
something , something of value to the promisor)
*Has to be something the promisor requested
*How is
*Always a detriment to the promisee as they have to give away or do something (money ,
action)
*It doesn’t HAVE to go to the promisor , as the promisor can go to a third party , promisor
may not get the consideration directly.
Benefit/Detriment analysis
Consideration – Performing an act , refraining from performing and act ,
promsing to do something in return
2 types of consideration
1)executive consideration – an act (the task is already done) (paint the house for $10000 ,
30 days to pay for it , painting the house was considered a executive consideration s it was
before the payment)
2)executory consideration -in form of a promise (i promise to give money to the promise but
only when I get the money . you plan to do it in the future not right away , but its perfectly
valid)
*Consideration cannot be unlawful or illusory
Illusory ( Matt say he will sell the oven and George says ill pay you if I feel like it )
*Cant be at one party’s discretion)
Consideration v Condition
*A condition needs to be fulfilled before a contract can be binding
*If the parties were more likely to be legally bound then it’s a consideration
Consideration: something your doing in response to the promise (the act)
Carlill v Carbolic smoke ball
Carbolic said Carlill
Anything that was labour or deteriment to the promisee
And the consideration :was the increase in sales for Carbolic S.B
Consideration: going out paying and purchasing the smoke ball
Condition precedent – was her actually getting the cold
Australian Woolen Mills v Commonwealth (1954) 92 CLR 424 HCA
*High court said there was no contract as the statement made was
*there was no connection between the promise given and the act of purchasing the wool
Beaton v McDivitt
McDivitt owned some land and promised to give some to Beaton only if he cultivated the
land in a certain way.
Beaton did it and built a house
After a few years a dispute arose and McDivitt ordered Beaton to leave the land
Court: Beaton “worked the land in that manner” so that was seen as a consideration and
there was definitely a contract between them.
Because why else would Beaton have done all of that if he didn’t have the promise in mind.
Good Consideration : anything the promisor stipulates and anything that isn’t illegal or
illusory.
Hamer v Sidway (USA ,1881)
*(in exam you should say that its persuasive and not binding as it’s a USA case).
Giving up the acts was a good side to the nephew and not a detriment so there was no
problem.
But giving up legal right was seen as being valid consideration.
Document Summary
*the price you pay for the promise *anything valued by the promisor. Person recievign the promise has to give something in return. For a bilateral contract both parties are responsible for a consideration. 3)no set rules which make it both easy and hard. 2)promisee seeking to enforce the promise showing that the promise is contractual. 3)the promisor is seeking an excuse for non-performance eg:carlill. In carlill your promise to use/act of using the smokeball was a good consideration. 1)when the promise is in a deed (under seal) Simple contract contract not under seal which need consideration (deed eg: letters of credit from banks , deed poll changing your name etc. ) When consideration fails, no contract , therefore no contract law , then estoppel steps in. 1)matt and george are both promises and promisors because this a bilateral contract. 2)consideration by matt is the promise of the oven, by george it"s the p(cid:396)o(cid:373)ise of the (cid:373)o(cid:374)e(cid:455)
