We use cookies to give you the best experience possible. By continuing we’ll assume you’re on board with our cookie policy

What is the doctrine of consideration Essay Sample

The whole doc is available only for registered users OPEN DOC

Get Full Essay

Get access to this section to get all help you need with your essay and educational issues.

Get Access

What is the doctrine of consideration Essay Sample

In order for an agreement to become a legally binding contract, the common law position is that there must either be a formalised deed or some form of consideration between the parties. The doctrine of consideration is based upon the idea that a promisee must give or promise to give something in return for the promise or unless the promisor has obtained or been promised something in return. The traditional concept of consideration is an objective one as only the things the parties said and did are taken into account, rather than their actual intentions.

However, recent judgements have placed more emphasis on the intentions of the parties when deciding if consideration has occurred as can be seen by Lord Justice Russell’s statement. ‘The courts nowadays should be more ready to find its existence so as to reflect the intention of the parties’1 This does not reflect the traditional relationship between consideration and intention to create legal relations but Russell’s LJ view does illustrate the continuing debate surrounding the actual meaning and function of consideration within contract law in the twenty-first century.

Consideration must occur in the present and not in the past for a contract to have legal effect2, but the consideration does not need to be adequate3. The consideration offered must be sufficient and move from the promisee4 in order for the courts to conclude a promise had been made and as Professor Treitel states, it must have ‘some economical value’. Part payment of a debt however, does not constitute good consideration for the entire debt5. The conventional view within contract law is that the performance of a contractual duty can constitute consideration, but the performance of an existing legal duty and performance of an existing contractual duty owed to the promisor does not amount to consideration unless a ‘practical benefit’ to the promisor arises.

In the case of Williams v Roffey Bros & Nicholls Ltd6, the defendant argued that consideration was not evident so the agreement was unenforceable but the court ruled that additional benefit received by the promisor does amount to consideration, which does raise the question as to how this case differed from Foakes v Beer. The ruling in In Re Selectmove Ltd 7differed to that in Williams v Roffey Bros & Nicholls with the court referring to Fokes v Beer instead and concluding that fresh consideration must occur for every new agreement that is made between parties. These cases highlight the necessary requirements for consideration to exist, with Williams v Roffey being an extension of the doctrine of consideration and Re Selectmove offering no consideration because a whole new agreement was established, which amounts to a new offer which requires fresh acceptance.

The continuation of an existing public duty does not amount to consideration unless this duty has been exceeded8, whilst the continuation of an existing contractual duty does not constitute consideration9 unless it is to a third party10. Forbearance can however amount to consideration, such as offering someone �100 not to knock down a fence, whilst acts which are illegal or so immoral that they are against established public policy, such as prostitution, cannot serve as consideration for enforceable contracts.

Professor Atiyah has challenged the orthodox definition of consideration, arguing that ‘the courts have never set out to create a doctrine of consideration’11 Professor Treitel rejects Atiyah’s thesis by stating that the courts do recognise ‘a complex and multifarious body of rules known as “the doctrine of consideration”’12 There is no clear definition of ‘consideration’, but it is generally observed that it involves one party giving or promising something in exchange for the other parties performance or promise of performance and is used as an enforcement mechanism in order to impose certainty, which is essential within contract law.

If an individual is unaware that only contracts which involve a degree of bargaining, are enforceable and relies on the good faith of an agreement, the doctrine of consideration would seem to have an unfair effect upon this individual. Equitable rules have developed therefore to address this clear problem in the form of reliance, with promissory estoppel providing a means to which individuals can ensure they are not exploited when they offer no consideration. Promissory estoppel can be used

‘Where, by words or conduct, a person makes an unambiguous representation as to his future conduct, intending the representation to be relied on and to affect legal relations between the parties, and the representee alters his position in reliance on it, the representor will be unable to act inconsistently with the representation if by so doing the representee would be prejudiced’13

If someone relies on a false statement, which they treat as a promise, as was the case in Hughes v Metropolitan Railway Co14, promissory estoppel can be used when there is no consideration as protection. There must be a pre-existing legal relationship between the parties under which the promisor promises to give up some rights in order for estoppel to be used in this manner, in affect, as a shield. Promissory estoppel cannot however, be used as a cause of action (or a sword), as can be seen in Combe v Combe15, as this would amount to using promissory estoppel as a cause of action.

This differs from the view taken by the High Court of Australia in Waltons Stores Ltd v Maher16, which explored the relationship between the doctrine of consideration and the equitable doctrine of promissory estoppel in depth. The defendants argued that estoppel could not be used as a cause of action and as there was no pre-existing legal relationship between the parties, they were not bound by any promise. The court rejected this and ruled that promissory estoppel could be used as a cause of action in some cases, which is contrary to the common law which is in place within UK contract law.

Promissory estoppel does not require consideration and is used where legal consideration is lacking, in order to protect the reliance interest of the claimant and not the expected interest, as to prevent the promisor going back on his promise where the promisee has acted in reliance upon it. The doctrine of consideration provides a clear way of identifying an intention to create legal relations and it does not only protect a reliance interest. If an individual promises to give someone £1,000 and that person then spends £500 before he gets the money as he believes an agreement has been made, promissory estoppel could be used as a shield in order to recuperate the �500, whilst an expectant promise would recuperate £1,000, but this would require consideration, highlighting the main difference between the doctrines of consideration and promissory estoppel.

We can write a custom essay

According to Your Specific Requirements

Order an essay

You May Also Find These Documents Helpful

Peculiarities of various assignment types

The educational process is diverse and full of interesting writing tasks which help students develop their academic abilities. Different assignments types are created by professionals in order to enhance students’ level of analytical, critical and writing skills and to vary the learning process. As a student, you will encounter numerous tasks of diverse complexities throughout your student life. Sometimes, maybe, too complicated! They have different peculiarities, structural...

Making decisions in health and social care

Critically analyses the concepts, features, and importance of costs and accounting in making decisions in health and social care Cost accounting is a method used in accounting to capture a company’s or organisation’s production costs. It assesses the input costs of every step in production, fixed costs like depreciation of capital equipment. Cost accounting measures and records costs individually then compare the input results via...

Сhildren development

Physical development 7-12 years By the age of 7 a child enjoys things such as bike riding and rollerblading they are now able to tie and untie shoelaces without adult help, they are now starting to understand what rules are and are able to follow simple rules. At 8-12 years a child improves the physical skills that they have already developed and start to see...

Forex international trading market

Introduction Forex exchange is on the rise in Namibia; resulting in more people wanting to learn how to trade to try to increase their income so that they can enhance their standard of living. Forex Foreign exchange identifies the process of converting domestic currency into international banknotes at particular exchange rates (Bofah, 2017, para.1). As the number of foreigners in Namibia is increasing, more Namibians...

Aristotelian idea of God

This image produced in 1544 shows emerging's of the Judeo-Christians and Aristotelian's traditions. Aristotle was very interested in the idea of motion and said “The world is in a constant state of motion and change”. An example of how the world is changing is the growth of trees and plants. Aristotle believed in a prime mover, which is the being which creates change in the...

Get Access To The Full Essay
Materials Daily
100,000+ Subjects
2000+ Topics
Free Plagiarism
All Materials
are Cataloged Well

Sorry, but copying text is forbidden on this website. If you need this or any other sample, we can send it to you via email.

By clicking "SEND", you agree to our terms of service and privacy policy. We'll occasionally send you account related and promo emails.
Sorry, but only registered users have full access

How about getting this access

Become a member

Your Answer Is Very Helpful For Us
Thank You A Lot!


Emma Taylor


Hi there!
Would you like to get such a paper?
How about getting a customized one?

Couldn't Find What You Looking For?

Get access to our huge knowledge base which is continuously updated

Next Update Will Be About:
14 : 59 : 59
Become a Member