“Consideration and its rules”
Prepared By:Prepared For:
Name: M Shahajada Hossain Barrister Ishtiaque Ahmed (ItA)
Date: 26th October, 2011.
Consideration is a very important element in a contract. While making a contract; parties of the contract agree to do or not do something based on exchanging some kind of value between them. These values they are exchanging are the consideration. So, without certain expectation an agreement is not enforceable unless there is some kind of consideration.
The British contract Act defines consideration as follows-
“when at the desire of the promisor, the promise or any other person has done or abstained from doing or does or abstains form doing, or promises to do or to abstain from doing, something, such act or abstinence or promise are called a consideration for the promise.”
Few days ago I choose to go to Cox’s Bazar. So book a bus ticket with 1,200 taka. In this case my promise, the consideration is the travel service and the bus company’s promise, the consideration is 1,200 Taka.
History of Consideration:
History of the consideration goes way back to 1600 and 1700 centuries. There was an interesting case of Stilk v Myrick (1809). So, this gives us an idea that the law of consideration is almost as old as the law of contract or the law of agreement.
Stilk v Myrick (1809) is an English contract law case of the High Court on the subject of consideration. In his verdict, the judge, Lord Ellenborough, decided that in cases where an individual was bound to do a duty under an existing contract, that duty could not be considered valid consideration for a new contract.
Stilk was contracted to work on a ship owned by Myrick for £5 a month, promising to do anything needed in the voyage regardless of emergencies. After the ship docked at Cronstadt two men deserted, and after failing to find replacements the captain promised the crew the wages of those two men divided between them if they fulfilled the duties of the missing crewmen as well as their own. After arriving at their home port the captain refused to pay the crew the money he had promised to them.
The defense, represented by Garrow, argued that the agreement between the captain and the sailors was contrary to public policy, and utterly void. In the judgment Lord Ellenborough read:
“Here, I say, the agreement is void for want of consideration. There was no consideration for the ulterior pay promised to the mariners who remained with the ship.” Modern commentators says that-
“The decision by the judge not to award the money to the plaintiffs was based at least partly on public policy; should he have done so it would have created precedent that would risk crew members blackmailing captains into giving them more money.” So overall we can understand modern lawyers don’t agree fully with this historical verdict. They think that because of various missing elements this verdict was not fully satisfactory. “Consideration is a historic device which should be dispensed with in modern times. The present rules on compromises of clam, omissions and agreeing to perform existing legal duties are unsatisfactory. The necessary thing is some evidence of an intension to be bound by a clear promise.” Now let’s discuss about this statement with some real life case examples.
Compromise and forbearance to sue:
A promise that doesn’t enforce a valid claim is good consideration for a promise given in return, as is a promise not to enforce a claim which is doubtful in law. Also a promise with an invalid claim cannot be enforced; an invalid claim is not a good consideration for a promise given in return. Cook v. Wright (1861) 1B & S 559, the claimants honesty believed that the...