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Consideration Law Essays

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Consideration Law Essays & Related Services

Consideration law essays (page 1), doctrine of consideration.

Example essay. Last modified: 6th Oct 2021

As defined by Sir Frederick Pollock, consideration is an act or forbearance of one party, or the promise thereof, is the price for which the promise of the other is bought, and the promise thus given for value is enforceable....

Excuse Defences and Justification Defences

Example essay. Last modified: 27th Sep 2021

Legal defences fall into two categories, excuse defences and justification defences. This essay provides examples falling in to each category....

Consideration is an Essential Element for the Formation of a Contract

Example essay. Last modified: 19th Aug 2019

Consideration must be of value that can be objectively determined, but the courts have the consistently refuse to look at its adequacy. Further, th......

Consideration is One of the Three Main Building Blocks of a Contract

Example essay. Last modified: 16th Aug 2019

In Australia, the bargain theory of consideration prevails, where the act or forebearance of one party or promise thereof is the price for which a ......

Traditional Rules of Consideration

Consideration can be defined as something of value given by both parties to a contract that induces them to enter into the agreement to exchange mutual performances which is enforceable by law....

The Element of Consideration

The question addresses the element of consideration. Firstly, consideration is a vital component of a binding contract. Good consideration as decided in Currie v Misa (1875) is usually valuable in the eyes of law, by means of profit or benefit to one party,...

Consideration includes Bargain Exchange sSwapping

Example essay. Last modified: 15th Aug 2019

Learning Outcomes: To show an understanding of what constitutes a consideration. To be able to identify the factors affecting the court’s ......

The Traditional Rules of Consideration

This essay will establish the traditional position by looking at case law such as Stilk v Myrick; Hartley v Ponsonby; Pinnels case and Foakes v Beer....

Good Consideration for a Fresh Promise

Example essay. Last modified: 12th Aug 2019

It will be highly inaccurate to state and conclude that the law has made it quite clear that the performance by contracting parties of their existing duties will not constitute good consideration for a fresh promise....

Outmoded or Even Redundant

To determine the relevance of consideration, we first need to understand the definition of consideration....

Consideration Is One Party Who Are Willing to Exchange Value for Value

Example essay. Last modified: 7th Aug 2019

The orthodox view is that, performance of an existing duty should not constitute consideration. Discuss...

Consideration Is an Act That Was Involved in the Formation of a Contract

Example essay. Last modified: 6th Aug 2019

A contract is forming by a few needed elements as is an offer, intension to create a legal relation, acceptance and consideration. Offer is the ......

Consideration is the Cornerstone of Legally Binding Contract

Example essay. Last modified: 22nd May 2019

Firstly, it is very important to identify the legal definition of consideration. Academic writers find it difficult to define the consideration. ......

A Support a Reciprocal Promise

In order for a promise by A support a reciprocal promise by B sufficient consideration must be established. According to Beaton v McDivitt,...

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Consideration of the Law of Contract Essay

The law of contracts deals with keep of promises; when agreements between two or more people form a contract that is legally enforceable. The parties to a contract have the rules to the contract (Dawson, 2011). Each party is expected to fulfill part of the contract, when not might cause damages to the other party. It is not always that promises are honored; the situation of the case determines whether the injured party is to be compensated for the damages or not (Sweeney, O’Reilly & Coleman, 2010). This paper analyzes different aspects of contract law using John and Chen’s case study outlined in the appendixes.

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What arguments could Chen use to support his refusal to pay John more than the original agreed price?

For contact to be enforceable in court, the parties to the contract should accept to the term and requirements of the contact with no external influence from the other person. The promises to the contract and the considerations that the parties had considered when making the contract are important aspects to determine the way forward on a contract. Looking at the way and point of view that Chen accepted the $10,000 increase in labor cost, some undue influence from John can be seen. In the first, the time for the completion of the work had started coming to reach. On the second, John had threatened not to do the work if the cost was not increased. Looking at the two situations, Chen was under undue pressure (indirect) from John to accept the increase in labor cost. Although the conditions of the market were evident that labor costs had increased, John is likely to have used the weapon of knowing that Chen’s family was nearing arrival thus used the force to force Chen to increase the prices (Carvan, 2005). Note the statement “Chen is anxious that the work be completed by the end of June so reluctantly agrees to the change,” the statement shows that Chen accepted the contract not at free will but from the influence of John and the situation (Sieg, 2011).

When signing the contract, Chen was thinking that his family was using the house when they visit Chen, this is called consideration that made Chen not like to accept the increase in the labor cost. The fact that he accepted an increase in the price dismissed the original contract where the labor cost was $6000 to now of $10,000. For contact to be enforceable, each party must fulfill their part according to the requirements of the contract this is the reason for thinking if it was done. In this case, John failed to fulfill his share of the contact thus Chen has this as a basis of not paying the high labor cost, the case says “John builds the extension but does not finish it until the middle of July,” looking at the considerations of the contract, Chen was keen on the timing of the extension and had made John aware of the same. With this in mind, Chen has the ability to refuse to pay for the extra labor cost (Tang, 2010).

Looking at the matter from a different perspective or to thinking another way, the reason why Chen accepted the increase in labor is in consideration of his family coming to visit him and probably the happiness they will get from the facility. This was however not fulfilled because of the negligence that John made. Under the duty of good faith, John would have considered the situation and ensured that the home is completed by end of June as they had agreed with Chen, this never happened (Whittaker, 2011).

Depending on the agreement for the $10,000, Chen can have an arguing point if the new contract was not written there or here; in the contracting law, a written contract cannot be nullified by a contact made by the word of mouth. If the parties never signed a new contract document, then Chen can still rely on the old document and enforce the costs that are documented therein (Deeksha, Elsje & Minette, 2009).

Looking at the fact of the case, Chen accepted the new deal as a consideration for the completion of the extension before his family jetted in the country. In the event that John had alerted him that the work would not be completed within the time framework, he probably would not have entered into the contract. The fact that John was a professional in construction and created an impression that despite delays in starting up the project, the project would still be completed in good time is the conduct of misrepresentation. John as a professional was at the upper hand to know that the house would not be completed within the time frame and advised Chen accordingly, however, he misguided him to sign the contract. With the basis, Chen has the legal baking not to pay the extra cost of labor (Randy, 2003).

What arguments could Chen use to support his claim for compensation?

The contact was to think of completing the premises so that Chen’s family can come and stay there; the idea and the reason was the one that had made the contact last until the end of June. When Chen was accepting the conditions set out in the contract, his main thinking was the fact that his family will have a place to live in when they get into the country. John failed to honor his promise of finishing the work in the allocated time; it was him that had signed and accepted the contract for monetary consideration and promised to finish the work before Chen’s family got into the country. John failed to do his promise; because of the dishonored promise, Chen had to incur some costs on hotel accommodation for his family totaling $1500 (Kendrick, 2005).

When looking at the case, had John finished the house within the allocated time as per the contract document, Chen would not have incurred the cost of hotel accommodation. It is true to say that it was because of John’s failure to honor his promise that Chen incurred the cost. Thus Chen has the legal backing of demanding compensation damages incurred from John. In the two contracts, one thing remains constant the time for completion of the building was before the end of June, John actually in the second set of contact accepted the contact with an increased amount despite having spent some time before starting the work. All along it is evident that John knew that the extension was made in anticipation of Chen’s family visit by June, however, he never made the effort of completing the work within the agreed framework (Riachards, 2005).

Another thinking that Chen can use to get payments is misrepresentation aspects of contract law; the fact that John was a professional in construction and created an impression that despite delays in starting up the project, the project would still be completed in good time is the conduct of misrepresentation (Lunenburg, 2011). John as a professional was at the upper hand to know that the house would not be completed within the time frame and advised Chen accordingly, however, he misguided him to sign the contract. It was through the misrepresentation that Chen accepted the contract that eventually lead him to suffer more damages of $!500 in hotel costs. From the start, John can be seen to have used his knowledge, professionalism and experience to misguide Chen into the contact and thus the much damage on Chen. Chen should thus seek compensation from John as the extra expense that he incurred on his family’s stay in the hotel was incidental or as a result of misrepresentation by John (McKendrick, 2005).

What arguments could John use to support his claim to the $10,000 he wants Chen to pay?

John can argue that when the parties set for a price of $10,000, it was based on good faith and undertaking of the business environment of which the two parties seemed to understand well. The adjusted price nullified the previous contract that the two had thus the previous contract that called for payment of $6000 was not in existence. With the argument, the contract that the two parties were acting upon was the new $10000 labor cost contract.

John can think that the two parties accepted the changed terms thus Chen was under the obligation of honoring the new contract. The fact that Chen is refusing to pay for the agreed amount because the family got into the country before the extension was complete can be argued not to have been the main consideration that the two parties had considered when entering into the contract. John can argue that the contract was for the completion of the extension thus the fact that the completion date failed to adhere was secondary to the main consideration (Gillies, 2004).

The fact that Chen accepted the contract when fearing or shaking should not be taken as an undue influence from John, it was the situation and his timing that made him fear that the family will find the extension not completed as well. On the other hand, Chen was negligent in that if he had known that the family was coming that soon, he would have contracted for the extension early enough.

When another argument that John can use is the fact that when the second contact was made (the $10000), he had not started the work and had offered the chance to council the contract. At this point, he had not said he will do his work him to doing work but Chen accepted the increased labor cost (Fafinski & Emily, 2009).

However, as much as the house was not completed for the time of visit, the increase in the cost of labor was not to be for the fast completion; there was no matching to complete and pay. To increase the cost was because of increase in cost was from the increased labor cost thus it had no relationship with fast completion. When thinking in the other words, the amount was not to facilitate fast completion, however, it was part of the main contract which involved completion of the expansion. Chen was thus under good doing to make his promise alive and pay the increased cost.

Carvan, J. (2005). Understanding The Australian Legal System . (5th Ed.). Sydney, NSW: Law Book Company.

Dawson, F. (2011). CONTRACT AS ASSUMPTION AND CONSIDERATION THEORY: A REASSESSMENT OF WILLIAMS V ROFFEY BROS. Victoria University Of Wellington Law Review , 42 (1), 135-158.

Deeksha, B., Elsje, B.,& Minette, N.(2009). Student’s guide to the law of contract . New York : Kluwer.

Fafinski, S.,& Emily F. (2009). Contract Law . London: Sage.

Gillies, P.,2004. Business law . Sydney: Federation Press.

Kendrick, E.,2005. Contract Law . Oxford: New Delhi: Oxford University Press.

Lunenburg, F. C. (2011). The Law of Contracts: What Constitutes a Contract?. FOCUS On Colleges, Universities & Schools , 6 (1), 1-4.

McKendrick, E. (2005). Contract Law – Text, Cases and Materials . Oxford: Oxford University Press.

Riachards, P.,2005. Law of contract. New York: Wiley.

Randy, E.(2003). Contracts . New York: Aspen Publishers.

Richardo, S., 2010. Contract Law Q&A 2005-2006 6/e. New Jersey : Wiley.


Sweeney, B., O’Reilly, J. And Coleman, A. (2010). Law In Commerce . 4th Ed. Chatswood: LexisNexis


Whittaker, S. (2011). The Optional Instrument of European Contract Law and Freedom of Contract. European Review Of Contract Law , 7 (3), 371-398.

The case analyzed

John agrees to build an extension to Chen’s house. At the time they enter the agreement, the price of building materials is increased week by week. John is reluctant to set a price for the work until he knows how much it is going to cost. Chen agrees in the contract that he will pay John “the purchase price of materials as at the date of completion plus $6000 for labor”. The parties also agree that the work must be completed by the end of June, as Chen’s family is coming to visit him at that time. Before the work begins, there is an unexpected increase in labor costs and an equally unexpected drop in the price of building materials. John tells Chen that he will need to increase the labor component to $10,000 or not do the job at all. Chen is anxious that the work be completed by the end of June so reluctantly agrees to the change. John builds the extension but does not finish it until the middle of July. Because of this, Chen had to pay for his family to stay in a hotel for three weeks at a total cost of $1500. Chen is now refusing to pay John more than the price of materials plus $6000 for labor. In addition, he wants John to compensate him for the money he had to pay for the hotel.:

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Example Contract Law Cases - What is Contract Law?

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What is Contract Law?

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Where is Contract Law used today?

Contract Law Cases - Examples

Carlill v. carbolic smoke ball co (1893) 1 qb 256 (ca).

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Coward v. Motor Insurers’ Bureau (1963) 1 QB 259 (CA)

Olley v. marlborough court ltd (1949) 1 k.b. 532, adams v. lindsell (1818) 1 b. & ald. 681, cite this work.

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Contract Law Essay

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Consideration Essay

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In the Oxford Dictionary of Law, consideration is defined as ‘An act, forbearance, or promise by one party to a contract that constitutes the price for which he buys the promise of the other. Consideration is essential to the validity of any contract other than one made by deed. Without consideration an agreement not made by deed is not binding; it is a nudum pactum  (naked agreement), governed by the maxim ex nudo pacto non oritur action  (a right of action does not arise out of a naked agreement).’ Without consideration, it is very hard to prove that a contract has been form, as it is an important element.  In the English Legal System requires that a promise must be legally binding. Whether this must be either contained in a deed, or a simple contract, consideration must have been given in order for a contract to be valid.

        The doctrine of consideration has developed over many centuries. Originally the doctrine of consideration was only based on a moral obligation. This theory can be seen in the case of Stone v. Withpool  (1588), where the judge said, “every consideration that doth charge the defendant in an assumpsit must be to the benefit of the defendant or charge of the plaintiff, and no case can be put out of this rule.”    However in the Eighteenth Century, Lord Mansfield took an open-minded attitude towards the topic of consideration as an essential requirement. In the case of Rann v Hughes  (1778), he ‘argued that a previous moral obligation was sufficient consideration for a future gratuitous promise.’   Then, in the case of Hawkes v. Saunders  (1782), Lord Mansfield said, “when a man is under a moral obligation, which no court of Law or Equity can enforce, and promises, the honesty and rectitude of the thing is consideration… The ties of conscience upon an uptight mind are a sufficient consideration.”  Things really developed in the Nineteenth Century, in the case of Eastwood v Kenyon  (1840), where the moral obligation caused the promise to be insufficient. Later the idea of detriment and benefit and was drawn into the doctrine, along with the idea of consideration being something of value in the judgment of the law, in the mid- nineteenth century. This final doctrine of consideration was described in Thomas v Thomas  (1842), “Consideration means something which is of some value in the eye of the law, moving from the plaintiff; it may be some detriment to the plaintiff or some benefit to the defendant, but at all events it must be moving from the plaintiff.”  

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        In order for a contract to be legally binding, there must be offer and acceptance, intention to create legal relation and consideration, which is a major element which the courts have to consider. On the other hand however, in family and social arrangements, it is not uncommon for people to make promises seeking nothing in return- so it is called gratuitous promises. ‘The doctrine of consideration seems to mean that gratuitous promises are not enforceable unless they are made by deed.’  This means that the law will enforce bargains not promises, because there are certain elements which are part of consideration in order for it to be sufficient consideration. There must be some sort of exchange, where there is benefit and detriment on from the plaintiff and defendant, as seen in Currie v. Misa  (1875), where the Judge said, “A valuable consideration, in the sense of the law, may consist either in some right, interest, profit or benefit accruing to one party or some forbearance, detriment, loss or responsibility, given, suffered or undertaken by the other.”   The exchange must have a value in the eyes of the law, which is either trivial or nominal consideration. Trivial consideration is seen in the case of Thomas v. Thomas  (1842), where the courts decided that a promise of a gift can be rendered enforceable and courts may be able to discover consideration in an essentially gratuitous situation. An example of nominal value can be seen in the case of Chappel v. Nestle  (1960), where it was found that chocolate wrappers were acceptable values of consideration. The judge in this case said, “A contracting party can stipulate for what consideration he chooses. A peppercorn does not cease to be good consideration if it is established that the promisee does not like pepper and will throw away the corn.”  This case illustrates one of the important rules of consideration, where it must be sufficient but need not be adequate.

There are some stipulations about consideration. One is that past consideration is not good consideration. This is because the notion of contract as a bargain means that consideration must be generally requested at the time of the disputed promise. In the case of re McArdle  (1951), because the family signed a document saying, “In consideration of your carrying out…”  consideration was found to be past. The only exception to this rule is when an act is done at the promisor’s request or when a promise to pay a pre-existing debt or obligation is enforceable.   When a promisee would be bound by law to do something, (for example, wear a seatbelt when driving), would mean this would be insufficient consideration. In Hamer v. Sidway  (1891), it was found that there was sufficient consideration, because the nephew wasn’t bound by law not to drink or smoke, it was his own right. If someone is under a public duty to do a particular task, then agreeing to do that task is not sufficient consideration for a contract. However, if someone exceeds their public duty, then this may be valid consideration , as seen in the case of Glassbrooke Bros v Glamorgan County Council (1925). Finally, the doctrine of privity of contract means that Judges will only consider who the parties to the agreement are and whether they have provided consideration. It was said by Lord Haldane in 1915, that “certain principles are fundamental. One is that only a person who is a party to a contract can sue on it…A second principle is that, if a person with whom a contract not under seal has been made is to be able to enforce it, consideration must or to some other person at the promisor’s request… A third proposition is that a principal not named in the contract may sue upon it if the promise really contracted as his agent. But again, in order to entitle him to sue, he must have given consideration either personally or through the promise, acting as his agent in giving it.”  


         Consideration is a useful doctrine for Judges to determining whether promises are enforceable. Consideration provides a vital element for a contract, in order for it to be enforceable. Normally the rules of consideration are called the badge of enforceability because ‘under classical contract theory, consideration is required for a contract to be enforceable.’

        There have been many criticisms over the years about the doctrine of consideration, by Judges and professors. One criticism is that the doctrine is too narrow and fails to give effect to the promised that ought to have legal effect. It has also been said that the doctrine has become extremely technical. As it the doctrine is divorced from commercial reality, the law does not look in the adequacy. Many have argued that the doctrine is too old fashioned and it is difficult to reconcile the doctrine with modern contract law, which asks the question if the promise is based on the will of the parties, why insist on consideration? Lord Goff once said, “our law of contract is widely seen as deficient in the sense that it is perceived to be to be hampered by the presence of an unnecessary doctrine of consideration.”  

         Many judges and professors have given their opinion on the future of the doctrine of consideration and therefore generated controversy about the desirability of consideration as the chief criterion of enforceability. Chen-Wishart explains in her book that there are four alternatives for the doctrine. The first is to replace consideration with the test of intention to bound, in which promises are unenforceable in a contract. The second is to replace consideration in modifications with the test of intention to be bound. The third is where ‘consideration’ means a good reason for enforcement. This means that the concept of consideration will include reliance, unjust enrichment and other good reasons, e.g. serious promises. The final alternative is to retain bargain promises in consideration but give recognition to non-contractual sources of liability remedies where it is appropriate.  However, if consideration was not the chief criterion of enforceability it would be much easier for a contract to be class as legally binding. Chen-Wishart argues that ‘intention to create’ and ‘duress’ would work much better as guidance on enforceability.   If this was put into practice, there would be no would for consideration, meaning that its history and related case law would become invalid. Therefore, consideration is only part of contract law, which is important, but not the chief criterion of enforceability of promises.

                                                                        Word Count: 1500

  The Oxford Dictionary of Law , pg 106        

  Stone v Withpool  (1588)

 George Applebey, Contract Law  (2001), pg 96

  Hawkes v Saunders  [1782] 1 Coup 289, 98 E.R. 1091

  Thomas v Thomas  [1842] 2 QB 851

 H G Beale, W D Bishop & M P Furmston, Contract Cases and Materials  (4 th  edn), pg 104

  Currie v Misa  [1875] LR 10 Exch 153, 162

  Chappel v Nestle  [1960] AC 87

  Re McArdle  [1951] Ch 669, [1951] 1 All E.R. 905, [1951] WN 211

  Dunlop v Selfridge  [1915] AC 847

  White and another v Jones and others , House of Lords [1995] 2 AC

 Chen-Wishart, Contract Law , pg 161

 Chen-Wishart, Contract Law , pg 161-162

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