Introduction Consideration is often defined as “a detriment voluntarily incurred by the promisee… or a benefit conferred on the promisor in exchange for the promise.”1 Whilst the doctrine of consideration does, in some cases, cause parties to experience injustice, sometimes something that the courts fail to resolve, consideration is a crucial element to the formation of a legally binding contract. This paper will not only explain why the High Court should not abolish the requirement for consideration but will also highlight its usefulness in contract formation. Origin of the Doctrine of Consideration The origin of the doctrine of consideration can trace its roots back to the 16th century when it became apparent for English courts to decide which parol promises were legally binding. With the growing concern that the range of promises for which a person could be held liable were becoming too wide, the courts began to look at the reasons for the promises.2 Coote argues that the idea of consideration can trace itself back even further, with examples such as “an exchange of tokens, shaking hands… and touching the ground”3 warranting the idea that people throughout history have made promises with the intent that they be legally enforced rather than simply be seen as statements of intention. Why the Doctrine of Consideration should not be abolished One of the primary reasons as to why consideration should not be abolished follows this idea, that parties who seek binding contracts are doing so in order to ensure the reliability of the other party. Thus, if consideration were to be abolished these agreements would be mere promises that carry no legal weight3 and undermine the essence of contract. Pao On v Lau Yiu Long (1980) provides ... ... middle of paper ... ...s would consider themselves bound to an agreement, but consideration does a good job of this already. Works Cited 1 Edward Jenks, The History of the Doctrine of Consideration in English Law (Cambridge University Press, 1892) 3. 2 John Cotter, A Modest Attempt to Demystify the Doctrine of Consideration, 17/09/2013, Academia, . 3 Brian Coote, ‘Consideration and the variation of contracts’ (2003) 3 New Zealand Law Review 361, 376. 4 Eg, Wright, ‘Ought the Doctrine of Consideration to be Abolished from the Common Law’ (1936) 49 Harvard Law Review 1225. 5 Brian Coote, ‘Consideration and the variation of contracts’ (2003) 3 New Zealand Law Review 361, 377. 6 Antons Trawling Co Ltd v Smith (2003) 2 NZLR 23, 23. 7 Musumeci v Winadell Pty Ltd (1994) 34 NSWLR 723.
Defining Issue: In order to make an agreement binding one element that must be used is consideration. Without consideration an agreement may not be enforceable, even if there has been an offer and acceptance. What a promiser demands and receives is the price for the promise, which is consideration. A person who makes the promise is called the promisor, while the person to whom the promise is made to is called the promisee. However, the promisor is not entitled to consideration.
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ABSTRACT: A commonly accepted criticism of the social contract approach to justifying political authority targets the notion of hypothetical consent. Hypothetical contracts, it is argued, are not binding; therefore hypothetical consent cannot justify political authority. I argue that although hypothetical consent may not be capable of creating political obligation, it has the power to legitimate political arrangements.
The law of contract in many legal systems requires that parties should act in good faith. English law refuses to impose such a general doctrine of good faith in the field of contract law. However, despite not recognizing the principle, English contract law is still influenced by notions of good faith. As Lord Bingham affirmed, the law has developed numerous piecemeal solutions in response to problems of unfairness. This essay will seek to examine the current and future state of good faith in English contract law.
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If English law decided to abolish the doctrine of consideration, it would rely on alternative methods such as promissory estoppel to replace the role of consideration in filtering out non-contractual agreements. The outcome of using alternative methods rather than consideration would impact on case precedency and it would change the formation of contracts as consideration is a key element in forming a contract. However, since there have been legitimacy and applicability issues raised regarding the doctrine of consideration, it seems necessary to look into the possible abolishment of consideration and find an alternative method to fill its role in contract law. This alternative method could be promissory estoppel if it wasn’t limited to a defence role, but also as a cause of action.
Despite it’s longevity, consideration is not without criticism. Lord Goff observed in White v Jones that: ‘our law of contract is widely seen as deficient in the sense that it is perceived to be hampered by the presence of an unnecessary doctrine of consideration’. Abolition has been urged. Since the publication of the Law Revision Committee’s report in 1937, la...
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The English legal system is ostensibly embedded on a foundation of a ‘high degree of certainty with adaptability’ based on a steady ‘mode’ of legal reasoning. This rests on four propositions
Consideration is anything of value promised to another when implied a contract. It is a promise, made in writing and signed by the person to be charged.Under section 2(d) of contract act 1950 define as promise has done something promise to
The courts of England and Wales acknowledge that the above must be something of value, in order to amount to consideration. A valuable consideration in the perspective of the English La...