Such consideration is not enough to make a commercial contract or promise enforceable because of the lack of a valid valuable and legal consideration. In a twoperson contract for example, both parties involved must promise something, whether it is a specific act or an agreement to pay a. The second exception to the rule that a promise based on moral or past consideration is unenforceable is a promise to perform a voidable obligation. The authors would like to thank an anonymous referee for very helpful comments and suggestions. Consideration australian contract law julie clarke. B for something that b has already performed before the promise was made, the performance of bs act is past consideration and is not good consideration. A past consideration is, in effect, no consideration at all. For example, if a promises to pay b for something that b has already performed before the promise was made, the performance of b. Past consideration is defined as an act done before a contract is made. The consideration which is past would have operated as valid consideration if the act was done at the promisors request. Moral or past consideration lawshelf educational media. Comparing executed consideration and past consideration 789 words 4 pages.
Consideration under indian contract act legal bites. After a month b promises to compensate a for the services rendered to him. Differentiate between executed consideration and past consideration consideration is one of the three main building blocks of a contract in english contract law and it is the exchange of benefit and detriment e. The rule that past consideration is not good consideration is subject to the exception discussed by the privy council in pau on v lau yiu long. The general rule is that consideration performed before a promise past consideration is not sufficient. In roscorla v thomas, a promise that a horse was of sound health was held unenforceable since it had been given after the original contract had been concluded. In malaysia law, passed consideration is recognized as a good consideration.
Consideration must be something of value in the eyes of the law thomas v thomas 1842 2 qb 851. The rule of past consideration is not good consideration has an exception. The argument is circular, and cannot therefore explain why promises are accepted as good consideration. Forbearance to act amounts to consideration only if one is thereby surrendering a legal right. Jul 11, 2016 past consideration is not good consideration. Past consideration is not good consideration the consideration must come into existence either with or after the promise. A promise is said to be given for moral or past consideration when the promisors motivation for making the promise is a past benefit he received that gave rise to a moral, but not legal, obligation to make compensation. Past consideration is not good consideration because it is not contingent on the responding consideration. A promise cannot be based upon the consideration that was provided before the promise was made. Consideration founded on natural affection, generosity, love, or moral duty. We explain this statement thoroughly throughout the video, elaborating upon why actions done in. Heavy rain and thunder sounds black screen, dark screen, relaxing, relax, sleep, white noise, study duration. Consideration is defined as either a bargained for gain or advantage to the promisee or a bargained for legal detriment or disadvantage to the promisor.
Consideration need not be adequate, but should be real. For a contract to be valid, consideration must be included at the time the contract was. However, there is an exception under common law which is past consideration would be good consideration if the act is done at the request of the promisor. Why a past consideration is not a good consideration answers. As a general rule, common law does not recognize past consideration as good consideration. This is different than english law as its general rule doesnt recognize past consideration.
The court in currie v misa declared consideration to be a right, interest, profit, benefit, or forbearance, detriment, loss, responsibility. Whether you are a business owner or an individual dealing with a relative, knowing when a contract can be enforced and at what point is very important to prevent either of the parties from getting burned in the process. The term past consideration refers to an act that was performed, or a promise that was made, before the new promise that is at issue and is being attempted to be enforced. There is, however, a statutory exception to this general rule. Past consideration insufficient to create contract unless. Definitions of past consideration common law systems consideration is anything given or promised by one party in exchange for the promise or action of another. Past consideration generally does not count as consideration in a contract. Generally, past consideration is not a valid consideration and has no legal. Must move at the desire of the promisor section 2d of the indian contract act, 1872, clearly mentions that the consideration should be at the desire of the promisor if the consideration is made at the will of the third person or is not according to the promisor then it is not a good consideration. Restriction of nongratuitous promises, so that you cannot accept offers, that i give so that you may give, that there are no formal restrictions, to restrict contract law. Actually speaking, consideration is there even in an agency in the sense that the principal has agreed to be bound by the acts of the agent. The courts will typically not permit past consideration for a current transaction and will void an agreement if it was based on past consideration. Past consideration is not good consideration where there is no promise there is no consideration past consideration is valid where the act was done on request of the promisee past consideration is always good consideration past consideration is part of a contractual term. Under common law of england the general rule, the view of past consideration is that it is not a good consideration and is not recognized by english law.
Past consideration is consideration that has already flowed from the promisee to the promisor. Past consideration is not good consideration the consideration must come into existence either at the same time or after the promise. Re mcardle for example, in mcardle, the plaintiff took it upon herself to do renovations before an agreement was made. Past consideration is no consideration 1509 words 123. For example, if a promises to pay b for something that b has already performed before the promise was made, the performance of bs act is past consideration and is not good consideration. Define what does or does not to amount to a good consideration. A promise to pay a debt barred by the statute of limitations is enforceable even if no new consideration is given. For more about consideration, see practice note, contracts. Consideration under the indian contract act, 1872 ipleaders. Past consideration cannot be included in a contract mostly because it did not benefit the promisor or pose any risk to the promisee.
Braithwait the plaintiff sued for money which the defendant had promised to pay him for services rendered previous to the promise, at the defendants request, but without any promise at the time of the request and of the rendition of. It is consideration that is already given or some act that is already performed and therefore cannot be induced by the other partys thing, act, or promise in exchange. There was an understanding there would be the conferment of some kind of reward, payment or benefit for the act. It is sometimes said that consideration requires benefit and detriment. In eastwood v kenyon, eastwood had supported his ward through childhood her husband, kenyon, later promised to repay him, but as eastwoods consideration was rendered in the past, kenyons. A quiz about the doctrine of consideration in english contract law q1. For example, if x promises to reward y for an act that y had already performed the performance of that act, while good consideration for the promise to be rewarded for it, is past consideration and therefore not good consideration. Generally, past consideration is not a valid consideration and has no legal value. Can move from the promisee or another person unlike. Exceptions to consideration no consideration and no contract.
Consideration may move from promise or any other person. Past consideration is generally not good consideration on 1 december 2008 most people will be familiar with a bankruptcy trustees rights to void transfers of property when that property was transferred for less than its value, or the transfer was intended to defeat creditors. Mar 19, 2018 what is consideration in contract law. The concept has been adopted by other common law jurisdictions, including the us. Stands as authority for the principle that past consideration is not good consideration. Past consideration law and legal definition uslegal, inc. Under the law, past consideration cannot constitute consideration for the new contract because it was not given for that new promise. The law does not enforce gifts unless they are made by deed. Therefore, as in malaysia, past consideration is good consideration. The court in currie v misa declared consideration to be a right, interest. Therefore as in malaysia past consideration is good.
If an act is done at the promisors request, although the promisors promise was given only after the act has been carried out, the act is good consideration. Therefore, the failure to have proper consideration will result in an unenforceable, invalid. For a contract to be valid, it absolutely must include consideration. Where the stipulated consideration predates the promise, it will not be considered good consideration eg, a promise by a to transfer ownership of a car to b in exchange for assistance b provided to a the. D then promised the horse was sound and free from vice.
Where the stipulated consideration predates the promise, it will not be considered good consideration eg, a promise by a to transfer ownership of a car to b in exchange for assistance b provided to a the previous month. The promisee performed the original act at the request of the promisor. Past consideration is generally not good consideration. Generally, past consideration is no consideration and cannot support an agreement because the detriment did not induce the promise.
While walking down the street, marsha steps into a hole and breaks her leg. Past consideration is not good consideration lampleigh v braithwaite past consiideration introduced doctrine of implied assumpsit past consideration is good consideration if the party only carried out the act on the assumption that the other party would provide consideration for it. Understanding contract law past consideration is a topic that anyone entering into any form of contract needs to understand. This excludes promises of love and affection, gaming and betting etc. It refers to a time before the making of a promise. Past consideration therefore cannot be used as a basis when claiming. Past consideration is no consideration logic justification. The agreement reached amounted to part payment of a debt and under the rule in pinnels case this was not good consideration for a promise not to enforce the full amount due. Consideration didnt move from the party so couldnt claim. Consideration is a concept of english common law and is a necessity for simple contracts but not for special contracts contracts by deed. Whether performance of, or promise to perform a pre existing duty is good consideration a duty imposed by general law b duty imposed by 3rd party c duty under a contract with the promisor i.
This rule is followed the idea of consider must be moved from promise. There was no consideration for the promise that the horse was sound. Misas case that suffering responsibility is a good consideration. In summary, for past consideration to be good the following criteria must be satisfied. In that case, their lordships held that past consideration can be good consideration where. Thus he undertakes the responsibility of the agent. Consideration must be at the desire of the promisor. Past consiideration introduced doctrine of implied assumpsit past consideration is good consideration if the party only carried out the act on the assumption that the other party would provide consideration for it.
Past consideration will typically not be recognized as valid consideration for a present contract. She then sued to have the promise by the owners that they would pay, once completed. The parties must have understood that the act was to be rewarded in some way, either by payment or by benefit. We explain this statement thoroughly throughout the video, elaborating upon why actions done in the past cannot be considered as consideration for a. Past consideration is insufficient to form a legally binding agreement. This promise is enforceable despite the absence of new consideration so long as the new promise is not subject to the same defense that made the original obligation voidable. Why past consideration is not good consideration answers. Consideration is the doing or not doing of something which the promisor desires to be done or not done. The often quoted, but not particularly helpful, definition of consideration contained in currie v misa 23 refers to these elements 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. A one sided promise which is not supported by consideration is a gift.
Past if the consideration by a party to an agreement was given in the past, i. The courts affirmed in this case that adequate consideration is not necessary, simply. A case which provides a good example of this is the post chaser 1982 1 all er. Consideration can comprise of a promise in return for an act executed consideration, as in unilateral contracts or involve a promise for a promise executory consideration, in bilateral contracts. That is, the promisees act or forbearance predates the promisors promise. The past consideration is promise is made after the promise has done the performance. The horse was in fact not sound and p sued for breach of contract. This principle was applied in the case of kepong prospecting ltd v schmidt 2.