THE NOTION OF CONSIDERATION HAS NOW BECOME SO CONVOLUTED THAT IT HAS NO MEANING OR RELEVANCE ANY MORE IN THE ENGLISH LAW OF CONTRACT. IT SHOULD NO LONGER BE REGARDED AS A NECESSARY ELEMENT IN A LEGAL CONTRACT.

Raheema Mohamoud

Consideration can be understood as both parties in a contractual agreement experiencing both a benefit and detriment, as they both exchange goods with one another. This means that consideration is based on the concept of reciprocity, of which the intent is to ensure that both parties get richer[1]. This view is supported by Sir Frederick Pollock’s definition that 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’[2]. This was approved by Lord Dunedin in the case of Dunlop v. Selfridge Ltd[3], where Lord Dunedin quoted the same notion.

 

Furthermore, the reason why consideration is deemed such a fundamental and central concept of Contract Law by McKendrick is because it provides contracts with a ‘badge of enforceability’[4]. This means that if the contractual obligation is not respected by both parties, then legal action to enforce the contractual agreement can be taken.

 

Evidence of this can be seen in Dunlop v. Selfridge Ltd[5], where the court detected that Dunlop did not provide any consideration to Selfridge and therefore had no right to claim for damages in court. Furthermore, the case of Tweddle v. Atkinson (1861)[6] in not protecting gratuitous promises, Roscola v. Thomas (1842)[7] and Re. McArdle (1951)[8] in past consideration not being valid consideration and finally Eastwood v. Kenyon (1840)[9] in moral obligations not being enforced in court, all further establish the same concept of consideration into BCL.

 

These cases coupled with expert opinion on the matter of consideration illustrate that there is a central universal notion and definition of consideration that is agreed upon by both legal experts and judges. This consensus upon the concept of consideration has been successfully applied to cases in order to achieve consistent verdicts and has resulted in making it a fundamental aspect of contract law, which without, contracts do not have any legal enforceability. Therefore, highlighting the importance of that concept in BCL.

 

When relevant cases are compared with one another, an argument can be made that the way in which consideration is seen and applied in these cases differ, resulting in contrasting outcomes that are difficult to reconcile. This can be seen in the cases of Stilk v. Myrick (1809)[10] and Williams v Roffey Bros & Nicholls Contractors Ltd (1990)[11]. In the case of Stilk v Myrick, the concept of ‘practical benefit’ was not acknowledged and applied in the same context as it was in the latter case, therefore leading to the court ruling that the Defendants were not entitled to receive extra payment, because they were under an obligation to carry out the work load with no extra pay. When this is compared to the case of Williams v. Roffey Bros, similarly Williams was under a contractual duty to complete the work assigned to him and therefore did not provide any consideration to Roffey Bros to receive the payment he was asking for, however unlike former case the court saw the practical benefit he provided Roffey Bros as sufficient consideration, thus making him entitled to receive payment.

 

This creation of practical benefit in the case of Williams v. Roffey Brothers changed the notion of consideration in such a way that, the original concept of ‘quid-pro-quo’ has now been expanded and selectively applied to cases, where there was no traditional form of consideration. This makes the concept of consideration confusing to understand because it is no longer a clear concept with boundaries of what it applies to and what it does not, but rather, because of Williams v. Roffey Brothers, it can apply in situations where there is no consideration, thus convoluting the notion of consideration.

 

Additionally, if cases are compared with one another further then even more inconsistencies can be found. For example, in the cases of Chappell v. Nestle[12] and Bluett v. White[13], Lord Justice Denning stated that ‘consideration does not stop being good consideration if the promisee does not like the consideration’. Lord Somervell agreed with this rationale and added that ‘a contracting party can stipulate 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’[14]

 

However, when this is compared to the latter case of Bluett v. White, the court declared that the promise to not complain was not deemed sufficient consideration to prevent the Respondent from paying his debt. However, if the same Ratio Decendi in Williams v. Roffey Brothers was used to this case, then the notion of practical benefit should have been recognised as sufficient consideration, due to the fact that the lack of complaints from the respondent could have constituted good ‘practical benefit’ and therefore should have eliminated the debt. This further emphasises the point that this new concept of consideration influenced by the decision in Williams v. Roffey Brothers is seen and applied only in certain cases, strengthening the argument that consideration has become a convoluted concept and that it has lost its once clearly established meaning….

 

Written by Raheema Mohamoud  

 

[1] Ewan McKendrick,Contract Law (12th edn, Springer 2017)

[2] Pollack, Principles of Contracts (13th edn, Stevens1950) p. 133

[3] Dunelop v Selfridge and Co. Ltd [1915] AC 842 (HL)

[4] Jill Poole, Textbook on Contract Law (13th edn, Oxford University Press 2016)

[5] Dunelop v Selfridge and Co. Ltd [1915] AC 842 (HL)

[6] Tweddle v Atkinson [1861] EWHC QB

[7] Roscola v. Thomas [1842] 3 QB 234

[8] Re McArdle [1951] Ch 669

[9] Eastwood v. Kenyon [1840] QB 438

[10] Stilk v. Myrick [1809] ER 317

[11] Williams v Roffey Bros & Nicholls Contractors Ltd [1990] 1 QB 1

[12] Chappell & Co. Ltd v. Nestle Co Ltd [1959] AC 87

[13] Bluett v. White [1853] 23 LJ Ex 37

[14] Richard Stone, The Modern Law of Contract (Psychology Press 2005)

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