Does_the_Doctrine_of_Promissory_Estoppel_Alleviate_the_Unfair_Effect_of_Consideration-libre

Topics: Contract, Contract law, Common law Pages: 15 (4238 words) Published: June 22, 2014
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Contract Law

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Contract law is a law which regulates the commercial world by enforcing contracts.1 Contracts allow consistency and also certainty in business transactions which in turn increases business efficiency. This is because a contract sets down clearly the obligations and rights of each party in an agreement, hence making sure that the parties are aware of their individual responsibilities before and after consensus ad idem or in other words the meeting of the minds principle.2 Based on

entering an agreement. This also forms the basis of contract which is the principle of

this principle, parties of a contract must have mutually agreed on all the terms in the

agreement. The agreement may be made void if such mutuality is found to be absent.3
After understanding the purpose of contract law, we will now question the requirements for a contract to be made enforceable. In the case of New Zealand Shipping Co Ltd v A M Satterthwaite & Co Ltd4 (more commonly known as The Eurymedon), Lord Wilberforce states that in order for a contract to be enforceable, a few elements have to be satisfied. These elements include offer, acceptance and consideration.5 Offer here is the expression of willingness to contract whereas acceptance is the unqualified assent to the terms of the offer (consideration will be discussed in the next paragraph). These elements must be accompanied with no

1

——, Co tra t La Defi itio accessed 29 December 2011.
2
Gerald N. Hill & Kathlee T. Hill, Meeti g of the Mi ds
accessed 29 December 2011.
3
——, Co se sus Ad Ide - U fair Co tra t a d S a s
accessed 29 December 2011.
4
New Zealand Shipping Co Ltd v A M Satterthwaite & Co Ltd [1975] AC 154 5
——, I trodu tio to Busi ess La
accessed 29 December 2011.

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Contract Law

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vitiating factors (ie: mistake, misrepresentation, duress) because such factors may affect the validity of the contract.6
Referring back to the question given, I will now discuss the essence of consideration. From the case of Currie v Misa7, Lush J stated that:

A valuable consideration, in the sense of law, may consist either in some

right, interest, profit, or benefit accruing to one party, or some forbearance, other

detriment, loss or responsibility, given, suffered, or undertaken by the 8

In other words, consideration is the price for which a promise is bought (definition of consideration in Dunlop v Selfridge 9 ). Following this, how do we value consideration, be it a price for a promise? Here I submit that a consideration need mutual agreement on the price in exchange for the promise, the consideration will not be adequate, it just needs to be sufficient. In other words, as long as there was a

be sufficient. This promotes the concept of freedom of contract and also freedom of

choice. This idea of sufficiency was submitted in the case of Chappell v Nestle 10 where it was stated by Lord Somervell that even a peppercorn does not cease to be good consideration although it may be thrown away by the promisee. 11 Moving on, I do submit that as established as consideration may seem, it does have its critics too. 6

th

Ewan McKendrick, Contract Law- Text, Cases, and Materials 4 Edition, Oxford University Press, 2010, 522.
7
Currie v Misa (1875) LR 10 Ex 153
8
th
Ewan McKendrick, Contract Law- Text, Cases, and Materials 4 Edition, Oxford University Press, 2010, 150.
9
Dunlop Pneumatic Tyre Co Ltd v Selfridge and Co Ltd [1915] AC 847 10
Chappell & Co Ltd v The Nestlé Co Ltd [1960] AC 87
11
th
Ewan McKendrick, Contract Law- Text, Cases, and Materials 4 Edition, Oxford University Press, 2010, 154.

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Contract Law

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The main criticism will be the narrowness of the scope of its definition. 12 In fact, this narrowness had also been deemed the reason why consideration...

Bibliography: 2. Mindy Chen- Wishart, Contract Law, Oxford University Press, 2005
3
University Press, 2010
4
(1997) 113 LQR 433
Electronic Sources
6. Hughes v Metropolitan Railway Co (1877) 2 AC 439
7
12. Walton Stores (Interstate) Ltd v Maher (1988) 76 ALR 513
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