Lecture on Consideration in Contract Law
Key Elements of a Valid Contract
- Offer and Acceptance
- Intention to Create Legal Relations
- Capacity
- Consideration is essential for a valid and binding contract.
Definition of Consideration
- Traditional Definition: From the case of Currie v Misa (1875)
- Consideration may consist of some right, interest, profit, or benefit to one party, or some forbearance, detriment, loss, or responsibility given or suffered by the other.
- Modern Definitions:
- Thomas v Thomas (1842)
- Consideration is something of value in the eyes of the law, moving from the plaintiff.
- Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd (1915)
- An act or forbearance of one party or the promise thereof is the price for which the promise of the other is bought.
Types of Consideration
- Benefit to Promisor or Detriment to Promisee
- Act or Forbearance
- Promise
- Creation, Modification, or Destruction of Legal Relations
Different Forms of Consideration
- Past Consideration
- Not valid unless specifically requested by the promisor or done by way of business.
- Executory Consideration
- Exchange of promises to do something in the future.
- Executed Consideration
- Act performed in exchange for a promise.
Rule: Consideration Need Not Be Adequate but Must Be Sufficient
- Adequacy: The sufficiency of consideration is not for the court to judge; it's for the parties to decide at the time of contracting.
- Bolton v Madden (1873)
- Chappell & Co Ltd v Nestle Co Ltd (1960)
- Sufficiency: Must be something of value in the eyes of the law.
Past Consideration
- Not generally good consideration.
- Re McArdle (1951)
- Exceptions:
- Act specifically requested by the promisor (Lampleigh v Brathwait (1615)).
- Act done by way of business (Pao On v Lau Yiu Long).
Forbearance as Consideration
- Forbearance to act: Can be valid consideration.
- Hamer v Sidway: Refraining from legal actions can be consideration.
Upcoming Topics
- Modifications introduced by the Ghana Contract Act of 1960 which will be covered in the next lecture.
These notes serve as an overview of the critical aspects of consideration in contract law and should be supplemented with case studies for a deeper understanding.