This assignment will discuss the notion of how consideration has now become so convoluted that it has no meaning or relevance any more in the English Law of Contract and how it should no longer be regarded as a necessary element in a legal contract. In reference to the case of Lush J. in Currie v Misa (1875), the notion of consideration has been given the definition of consisting of a detriment to the promisee or a benefit to the promisor:”… some right, interest, profit or benefit accruing to one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other”.1 The concept of the notion of consideration as an element within contracts has been influenced due to the many judgements made by various cases. Furthermore, it has also impacted into introducing other factors and elements that have become a part of consideration. Due to the many changes over time, consideration has become more flexible in some areas. The improvement was a positive factor in terms of showing that the law is being updated, bringing the idea that it also makes consideration more complex what creates a debate about whether consideration has lost its meaning and value within the English law.
It is argued that the doctrine of consideration by Sir Edward Jenks2 , that the practice of consideration was actively practised in 1890 but its evolution can be traced to originating to the twelfth century. Furthermore, it is also argued that the doctrine of consideration came into English law accidentally due to the consequences of an incident due to a specific type of proof; and this did not occur until there was a further familiarity with consideration and became a valuable element and aspect in terms of being a part of a doctrine of substantive law.”
However, it is also brought into account by John Wilson Twyford3, that from 1809 the common law has provided in a clear manner in terms of how a promise by a party to perform an act that he or she is already legally bound to perform is not good consideration. Therefore, a promise that is received in exchange is not enforceable. This is due to the factor in whether the promise would have the effect of creating a new contract. The rule has from time to time has been the subject of criticism but nevertheless was functioning to its full extent until 1991. This has been effective in existence, that did not with what the parties hoped to gain from the exchange or what each in fact gained.
There are two types of consideration, executory consideration and executed consideration4 . Executory consideration is when there is an exchange of promises to perform acts in the future.
Executed consideration is when one party makes a promise in exchange for an act by the other party when that act is completed, it is executed consideration.
There has been an ongoing debate throughout the years in whether or not consideration is actually required within a contract.
During the 1800’s which is argued when the element of consideration came into existence in being a part of the contracts, one of the early examples of old law cases is the case of Stilk v Myrick (1809),5 one of the cases worth mentioning during the time period where the role of pre-existing duties was significant, as Stilk had signed a contract with Myrick and both parties made promises. However, Stilk was unable to sue as the judgement made was based on how the seamen involved, had responsibility and an existing duty and therefore no consideration made. Whereas in contrast, in the case of Hartley V Ponsonby (1857) 6, Hartley was able to sue Ponsonby due to there being consideration in regard to the performance of existing duty and is one of the examples where the element of consideration was actually significant and beneficial.
More so, it can be further argued that consideration was a necessary element within contracts as we take into account , the case of Roscorla v Thomas (1842)7 ,which is notable in the English law of contract where it is demonstrated that past conduct 8 is not sufficient consideration to support a contract, and further emphasise that in order for the contract to exist and its terms to have validity, there needed to be consideration provided, but the deal had already taken place and the defendant was not able to make a claim.
As well as highlighting, that the element of consideration was defined to sufficiency being necessary, whereas adequacy is not a requirement. Contextually, it is clearly defined in regard to the law for the notion of consideration to being sufficient, it needs to have necessary elements consisting of how it should be real, of value and also substantial.
This further implies that the notion of consideration is not convoluted to an extent, instead it is presented in a clearer manner and contributes to the sole purpose of the role of consideration to implementing assurance and conviction between the two parties participating within the contract.
In comparison to the case of Stilk V Myrick (1809), There was a further development in the notion of consideration in the time period of the 1900’s which is present in the case of Williams v Roffey Brothers (1990)9.
The case of Williams V Roffey Bros, has limited the impact of the Stilk V Myrick case from the 1800’s, in terms of allowing there to be variety among terms in contracts in which both parties reach the agreement to take on further duties or accept risks that might be added on that were not foreseen within the contract itself. There is the suggestion that contract performance in the case of Stilk v Myrick could have been decided to be fresh consideration and therefore implies that the decision made was wrong. Meanwhile, even though it led to the development in terms concept of how fresh consideration is required from each party within the amendment of a contract; it can be argued that a promise made without any duress needs to be enforced when the parties have acted upon it and when it is suggesting by the circumstances that there might be the possibility of the element of consideration being present.
This can be linked back to the debate on whether the notion of consideration has been convoluted however it is implied in reference to the cases it can be seen that fresh consideration being required cements the idea that it is an important element within the English law of contract or contract law in general.
In reference to the argument that consideration has become convoluted that it has no meaning or relevance any more within English Law of Contract and how it should no longer be regarded as a vital within a legal contract, is the factor that there is a struggle in terms of the precise purposes of the doctrine being established.
To support the view that there has been a lot of changes and improvements within case law, as seen in the contrasting cases of Stilk v Myrick and Williams V Roffey Bros that has been presented. Other aspects in which there has been development are elements such as offer and acceptance and intention to create legal relations has also become a part of consideration and can be argued to fulfilling functions and in turn contribute to the view that the notion of consideration is losing its relevance taking into account that there has been creations of new principles and doctrines due to several problems occurring. There is also the fact that consideration’s purpose and role has been changed by the case law’s influence. This is seen in the case of Williams V Roffey Bros & Nicholls (contractors) Ltd (1989) 10,where it was decided that the role of consideration has to show that the parties intentions are reflected within the agreement. This adds on to how the function to create legal relationships that is usually implemented by the principle of intention, uses the notion of consideration as a substitute.
This factor emphasises on the notion of consideration being convoluted as it presents this view of it not having a relevant role within contract law as there are various policies in existence that have the ability to perform the same purposes. Additionally, the judgement has been viewed to be regarded in a controversial manner, and also not showing a true reflection of the established understanding of consideration, it is still highlights the factor in why consideration is believed to be convoluted as there is confusion towards consideration and its relevance and purposes as well as weighing in whether it’s role within contracts is becoming an unnecessary element. It is also proven further that consideration has become an element that is not needed as there are suggestions by several critics that consideration should deserted and to no longer be required as being a necessary element within contracts,purely on the basis of the argument that the implementation of distinguishing what is an enforceable agreement and an unenforceable agreements is already carried out by other doctrines in which the factor that an intention to create legal relations is established as a requirement11. This can be argued to present the idea that there are other influential and various effective doctrines that implements the intentions of entering a contract being established as opposed to bring in the element of consideration. Thus, also highlighting that the relevance of the doctrine of consideration has decreased within contract due to the fact that its main purposes can be replaced by other alternate principles.
Additionally, the argument in the notion of consideration becoming convoluted can be seen on the basis of how it is interpreted. It is seen through observing the way courts approach in an unreliable manner as it has not been consistent in terms of defining the benefits and values and therefore adding on to the uncertainty and convolution of consideration. One of the most complex areas in terms of weighing in and examining consideration is the interpretation by the courts and putting the doctrine to be in an uncertain position about its role.
The case of Percival v Wright (1902)12, for example, the judgement made by the court was that consideration element was present even though there were no benefits for the promisor, and the ‘detriment” element was also not present for the promisee. The two juxtaposing cases of Foakes v Beer 13and White V Bluett14, emphasise the convolution of consideration. In the case of Foakes v Beer, the ‘benefit’ term was interpreted in a biased way, whereas in comparison to the case of White V Bluett, the term was interpreted objectively.
It should also be brought to consideration that the courts inability and inconsistency on the basis of their interpretations and their method of implementation in defining the element of consideration, further contributes to being one of the reasons why it is suggested to being convoluted.
As previously mentioned, a key argument in why consideration is being argued to be unnecessary is the existence of the doctrine for the creation of legal relations.
Taking into account, the factor that there is a clear indication that both parties are aware of the importance of taking on a responsibility in participation within an agreement/ obligation15 due to the element of consideration existing, at the same time this does not show an obligation legally.
It can also be suggested that the consideration does not perform the necessary purposes it is meant based on the fact that there would not have been a necessity of having to introduce another doctrine. This can be interpreted that even with the acceptance of consideration existing as “testing bargains” 16and its sufficiency in proving the seriousness of the parties’ intentions, it is still insufficient in terms of providing the crucial function of the creating the intention of the creation of legal relations test. There is further indication that the latest and more improved