Consideration - Business Law
Richard misses his plane from London to Paris. Ryan takes him there by car. As he gets out of the car, Richard promises to pay Ryan $1000 for his efforts
Issue: Is there any consideration for the promise made by Richard?
The Law: Every contract requires an offer, acceptance, and consideration. Consideration is the exchange of benefit and detriment, for example, the making of a promise in exchange for an act. If a party voluntarily acts and then the other party makes a promise, the act is said to be “past consideration.” A past consideration is some act or forbearance in time past by which a man has benefited without thereby incurring any legal liability. In other words promises made in return for actions or events that have already taken place are unenforceable. These promises lack consideration in that the element of bargained-for exchange is missing. In short, one can bargain for something to take place now or in the future but not for something that has already taken place. Therefore past consideration is no consideration. Also there is no validity in past consideration and cannot be used to sue on a contract. For example, if A gives B a ride to the market and back home again. If when A delivers B to his house, B promises to give A some gas money. A cannot sue B to enforce B’s promise since the consideration (A’s act of giving B a ride) occurred before B's promise. A gave B the ride without expecting anything in return. In essence A did not give B a ride in exchange for B giving A gas money.
Case Re McArddle (1951) Ch 669 : In the case, a man left a house to his children and the wife of one of them undertook some decorating. The other children subsequently signed a document agreeing to contribute to the costs. It was held that the agreement was not enforceable, as it was not supported by consideration.
Analysis: In the case in question: (Richard misses his plane from London to Paris. Ryan takes him there by car. As he gets out of the
Issue: Is there any consideration for the promise made by Richard?
The Law: Every contract requires an offer, acceptance, and consideration. Consideration is the exchange of benefit and detriment, for example, the making of a promise in exchange for an act. If a party voluntarily acts and then the other party makes a promise, the act is said to be “past consideration.” A past consideration is some act or forbearance in time past by which a man has benefited without thereby incurring any legal liability. In other words promises made in return for actions or events that have already taken place are unenforceable. These promises lack consideration in that the element of bargained-for exchange is missing. In short, one can bargain for something to take place now or in the future but not for something that has already taken place. Therefore past consideration is no consideration. Also there is no validity in past consideration and cannot be used to sue on a contract. For example, if A gives B a ride to the market and back home again. If when A delivers B to his house, B promises to give A some gas money. A cannot sue B to enforce B’s promise since the consideration (A’s act of giving B a ride) occurred before B's promise. A gave B the ride without expecting anything in return. In essence A did not give B a ride in exchange for B giving A gas money.
Case Re McArddle (1951) Ch 669 : In the case, a man left a house to his children and the wife of one of them undertook some decorating. The other children subsequently signed a document agreeing to contribute to the costs. It was held that the agreement was not enforceable, as it was not supported by consideration.
Analysis: In the case in question: (Richard misses his plane from London to Paris. Ryan takes him there by car. As he gets out of the