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Consideration is the third essential element of a valid contract (alongside offer and acceptance, and intention to create legal relations). Without consideration, a promise is a mere gift and generally unenforceable in English law. This lesson examines the definition and rules of consideration, the treatment of past consideration, existing duty obligations, and the doctrine of promissory estoppel.
Consideration is something of value given by each party to the contract. It is the "price" for which the other party's promise is bought.
The classic definition comes from Currie v Misa (1875), where Lush J stated:
"A valuable consideration, in the sense of the law, may consist either in some right, interest, profit or benefit accruing to the one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other."
A simpler formulation was given by Pollock, approved by the House of Lords in Dunlop Pneumatic Tyre Co v Selfridge & Co [1915]:
"An act or forbearance of one party, or the promise thereof, is the price for which the promise of the other is bought."
| Type | Definition | Example |
|---|---|---|
| Executory | A promise to do something in the future | A promises to deliver goods next week; B promises to pay on delivery |
| Executed | An act performed in return for a promise | A offers £50 reward for return of lost dog; B finds and returns the dog |
| Past | Something already done before the promise was made | A rescues B's child; B then promises to pay A £500 |
The courts do not assess whether the consideration is a fair exchange. They simply require that it has some recognised legal value ("sufficient"), regardless of whether it is a good deal ("adequate").
In Thomas v Thomas (1842), a widow was allowed to stay in her late husband's house for a rent of £1 per year. The court held that £1 was sufficient consideration, even though it was clearly not an adequate market rent. The court will not inquire into the adequacy of the bargain.
In Chappell & Co v Nestle Co Ltd [1960], Nestle offered a record in return for 1s 6d plus three chocolate bar wrappers. The House of Lords held that the wrappers were part of the consideration, even though Nestle threw them away. The wrappers had economic value because they encouraged people to buy more chocolate.
Exam Tip: "Sufficient but not adequate" is one of the most commonly tested rules. Use Thomas v Thomas for adequacy and Chappell v Nestle for sufficiency. The key point is that the court checks whether consideration is real and tangible, not whether it is a fair deal.
Past consideration is something done before the promise is made and is generally not valid consideration.
In Re McArdle [1951], a wife carried out improvements to a house during her husband's lifetime. After the work was finished, the other family members signed a document promising to pay her £488. The Court of Appeal held this promise was unenforceable — the work had already been done before the promise was made, so it was past consideration.
Exception — Lampleigh v Brathwait (1615):
There is an important exception where past consideration is valid if three conditions are met:
In Lampleigh v Brathwait (1615), Brathwait killed a man and asked Lampleigh to obtain a royal pardon. Lampleigh spent considerable time and effort doing so. Brathwait then promised to pay £100 but failed to do so. The court held the promise was enforceable because Lampleigh acted at Brathwait's request, with an implicit understanding that payment would follow.
This exception was confirmed by the Privy Council in Pao On v Lau Yiu Long [1980], where Lord Scarman restated the three conditions above.
graph TD
A["Was the act done<br/>BEFORE the promise?"] -->|No| B["Valid Consideration<br/>(Executory or Executed)"]
A -->|Yes| C["PAST CONSIDERATION<br/>(Generally invalid)"]
C --> D{"Were the Lampleigh v<br/>Brathwait conditions met?"}
D -->|"1. Done at promisor's request<br/>2. Understood payment would follow<br/>3. Would have been enforceable if<br/>promised in advance"| E["Exception Applies:<br/>Past consideration IS valid"]
D -->|"Conditions NOT met"| F["Past consideration is<br/>NOT valid — promise<br/>is unenforceable"]
style B fill:#27ae60,color:#fff
style C fill:#e74c3c,color:#fff
style E fill:#2ecc71,color:#fff
style F fill:#c0392b,color:#fff
Only a person who has provided consideration can enforce a contract. This is the rule of privity of contract and the rule that consideration must "move from the promisee."
In Tweddle v Atkinson (1861), two fathers agreed that each would pay a sum to the claimant (the groom) upon his marriage. One father failed to pay. The court held the groom could not enforce the promise because he had provided no consideration — the promise was between the fathers.
Note: The Contracts (Rights of Third Parties) Act 1999 has partly reformed this area by allowing a third party to enforce a term of a contract in certain circumstances.
The consideration must not involve anything illegal or contrary to public policy.
If a party is already legally obliged to do something, promising to do the same thing again does not generally constitute valid consideration. This is discussed in detail below.
Where a party is under an existing public duty, performing that duty is not valid consideration for a fresh promise.
In Collins v Godefroy (1831), a policeman who was under a court order (subpoena) to attend court could not claim payment for doing so — he was simply performing his existing duty.
However, if a party goes beyond their existing public duty, the extra performance is valid consideration. In Glasbrook Bros v Glamorgan County Council [1925], the police provided extra protection for a mine beyond what was reasonably necessary. The mine owner's promise to pay for this additional protection was enforceable — the police had exceeded their public duty.
If a party already has a contractual obligation to do something, promising to do the same thing is generally not valid consideration for an additional payment.
In Stilk v Myrick (1809), two sailors deserted during a voyage. The captain promised the remaining crew extra wages to sail the ship home. The court held that the remaining sailors had provided no consideration for the extra wages — they were already contractually bound to sail the ship home and to cope with normal contingencies such as desertions.
However, in Hartley v Ponsonby (1857), so many sailors deserted that the voyage became dangerous. The court held that the remaining crew's agreement to continue constituted valid consideration — the situation went beyond what they were contractually obliged to do, effectively discharging their original contracts and forming new ones.
The Williams v Roffey Bros Principle:
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