The Governors of Dalhousie College at Halifax v. The Estate of Arthur Boutilier, Deceased
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Issues
Was there sufficient consideration to warrant an enforceable contract?
Did Boutilier’s promise in the subscription constitute a binding contract?
Ratio
A charitable pledge, even though formally made and seriously intended, is considered to be a mere gift, and even the detrimental reliance of the party to whom it is made is not sufficient consideration
Unless there is a an exchange of benefit from both sides its not a legally binding contract
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Brantford General Hospital Foundation v. Marquis Estate
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Issues
Does the pledge constitute a legal and binding contract that is enforceable or does it fail for lack of consideration?
Ratio
For a pledge to be considered an enforceable contract consideration must be shown.
Name recognition for the donor is not sufficient consideration unless it can be proven that the donor required the naming as a condition to making the donation.
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Wood v. Lucy, Lady Duff-Gordon
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Issues
Was there consideration and can it be enforceable when there is no explicit promise made by the person?
Ratio
An implied promise of one party can be sufficient to constitute consideration for a contract.
This is an example of the Courts reaching to find something reasonable for the purposes of salvaging an enforceable contract with implied consideration.
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Past Consideration
Eastwood v. Kenyon
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Issues
Is there a binding contract to pay back the loan or does it fail for lack of consideration?
Ratio
Past consideration is no consideration at all.
A pre-existing moral duty does not confer consideration.
There is no consideration for a voluntary gift not requested by the person receiving the gift
Often in past consideration cases the subsequent promise is brought about by a sense of moral obligation
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Lampleigh v. Brathwait
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Issues
Is there a binding contract or does the promise fail for lack of consideration?
Ratio
A request, coupled with the promise to pay, amounts to a binding contract even though the request and the promise are separated in time.
The request is wha makes this case different from the previous case in which sara not her husband didn’t ask for her education to be paid for
Consideration must be value in the eyes of the law
The law doesn’t require that consideration be adequate or equivalent in value to the promise made, but it does require that there be sufficient consideration.
The law wont assess if it was a good deal or not. This is known as the “peppercorn” principle
This is an example of an exception to the past consideration rule. More modern thinking would suggest that where a service is performed with a reasonable expectation of compensation, a binding obligation will exist. The subsequent promise simply expresses it
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Values of Consideration
Thomas v. Thomas
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Issues
Was there sufficient consideration?
Ratio
Consideration may be something small as long as it has some value in the eyes of the law
A moral obligation itself would not constitute good consideration, but in this case, it was not simply done for moral reasons. The Mrs.
Thomas was paying rent, and upkeeping the house. Therefore there was consideration. An exchange is taking place, that is all a contract needs; doesn’t matter how unequal it is!
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Pre-Existing Legal Duty
Duty Owed to a Third Party
Pao On v. Lau Yiu Long
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Issues
Was there good consideration given for the guarantee?
Ratio
A promise to perform, or the performance of, a pre-existing contractual obligation to a third party can be valid consideration.
In the case of economic duress, it must be proved that the victim’s consent to the contract was involuntary on his part. Commercial pressure is not enough.
The Court also stated that an act done before the giving of a promise to make a payment or to give a benefit can sometimes be consideration for the promise so long as three preconditions are present:
1 .The act must be done at the promisor’s request;
2 .The parties must have understood that the act was to be given in exchange for a payment or conferment of some benefit; and
3. The payment or the giving on a benefit must be legally enforceable had it been promised in advance.
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Lecture 7
Duty Owed to the Promisor
Promises to Pay or Provide More
Stilk v. Myrick
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Issues
Was there a contract to pay the additional wages, or did it fail for lack of consideration?
Ratio
The performance of a pre-existing contractual duty that is already owed to the promisor is no consideration for another contract.
This is the basis for all we are looking at, when looking for that consideration doesn’t exist.
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Gilbert Steel Ltd. v. University Const. Ltd
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Issues
Was the agreement to pay the higher prices legally binding upon the defendant or did the agreement fail for lack of consideration?
Ratio
A promise to perform a pre-existing contractual duty already owed to the promisor does not constitute consideration without something more. (same as stilk)
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Promises to Accept Less
Accord and Satisfaction
Foakes v. Beer
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Issues
Whether the agreement was legally enforceable.
Ratio
A promise by a creditor to accept a smaller amount in the payment of a debt is void for a lack of consideration.
This is known as the Rule in Pinnel’s Case.
The doctrine of accord and satisfaction does not create an exception to the requirement of consideration.
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Foot v. Rawlings
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Issues
Did the Agreement prevent the Respondent from suing for the debt, or was the Agreement unenforceable because of a lack of consideration?
Ratio
An exception to the rule in Pinnel’s Case is that payment of the original debt by way of some new form, such as a negotiable instrument, can constitute consideration for the promise by the Creditor to release the Debtor from the full debt.
Payment of a lesser sum does not discharge obligation to pay full amount owning…but if true accord is established, creditor voluntarily agrees to accept lesser sum in satisfaction, debtor acts on that accord paying lesser sum of which creditor accepts, then it will be inequitable for the creditor to subsequently insist on the balance.
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Duty Owed to the Promisor—Judicial Reform
Nav Canada v. Greater Fredericton Airport Authority Inc.
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Issues
Was the promise to pay for the equipment enforceable?
Is there fresh and valid consideration in this modified contract?
Were the new modification signed under duress?
Ratio
A post-contractual modification unsupported by consideration may be enforceable so long as it is established that the variation was not procured under economic duress.
Fresh consideration—the party seeking to enforce the variation must establish either that it was no procured under economic duress of that the other party is precluded from raising the duress doctrine for having subsequently affirmed the variation
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