Consideration in English Law Is Required in Every Contract - Essay Example

?English Contract Law Inserts His/Her Inserts Grade Inserts 7th May, Introduction In the pursuit of undertaking business or trade, several transactions and activities take place. These activities have to be governed by law and in most cases it is the law of contracts that governs and protects the terms and conditions that are agreed upon in the contract. For a contract to be valid certain terms have to be met by law. One of the most used terms in law is consideration and this is meant to give meaning contracts. Consideration is one of the tenets of the contract law. Consideration in most cases is referred to as promise given in return for something. This essay will look into English law of contracts in relation to consideration. Overview Consideration can be described as the price to which a promise is given in return for something else. In most cases, promises need not to be in terms of money but in many other forms. According to the law of English contracts, if an agreement or a promise is not supported by consideration then it is considered nudum pactum (a bare promise) and it is not enforceable by law. The English contracts laws have traditionally had the clause of consideration for the contract to be accepted as. For instance, in large or valuable transactions, the law requires that all parties bring something of value “consideration” for a contract to be legally binding. This law of consideration was designed to ensure that all parties are given fair treatments or equal standing in the formation of contracts (Jenks, 2010). This clause is important especially in cases where issues arise after the formation of a contract. Consideration law can be used is solving changes to the contract law in cases such as in debugging the equitable doctrine of promissory estoppels. This is the case whereby earlier terms or agreements cannot be enforced in the solution of cases. Consideration is regarded as an agreement that had the intentions of the terms to be legally binding. Consideration can be anything that is sufficient in that it can be weighted and decided to have economic value (Cruz, 2008). English courts make use of consideration in deciding whether promises or contracts are legal or enforceable. A consideration cannot be drawn in the past unless there are express terms of a request by either of the parties. Several cases have presented difficult situations for solution of cases such as part payment of debts or undertaking duties currently obligated. This was evident in the case of Williams vs. Roffey where the court decided that the contract was legal since the duties undertaken by Williams went beyond his legally obligated duties (Chitty, 2006). Considerations are important in English law in that they are used in making sure that the terms of the contract can be enforceable. This is especially true in cases or contracts that are supposed to be enforced in the future. But the most used form of the term consideration in contracts is when there is a direct exchange of goods for money or goods for goods. Consideration in contracts is normally enforceable and practised practically when something has been given or promised in exchange for something else. A promise in English law is a contract if a promise or consideration is attached to the promise (Atkins, 1999). For instance, if you promise to pay or buy someone a gift who have to write it down or make a deed. In the case of Currie vs. Misa of 1875, consideration in the sense of law consists of interest, benefit or profit accruing to one person and detriment or loss of responsibility to be undertaken by the other party. The understanding and execution of these contracts are quite simple. In some cases the execution or implementation of the law of contracts is difficult as in the case of Dunlop Pneumatic Tyre Co Ltd vs. Selfridge & Co Ltd of 1915, whereby consideration was difficult to enforce. In such as case, there was exchange of promises where neither of them was enforced. The making of the contract was based on the execution of both promises (Elliott, 2007). This raises the question of if it is possible for consideration to be cause a loss to the person making the promise. In general we refer to consideration in terms of benefits and losses to different parties. For a consideration to be considered in English contracts laws it is important for the promise to be enforced. That the consideration or promise can be brought forward in a court of law in the process of deciding the case in case of any problems in the enforcement of the laws. The consideration in the drawing of a contract needs to be sufficient but it needs not to be adequate (Cruz, 2008). This is case is better presented in the case of Thomas v Thomas (1842) whereby the court ruled that their agreement met all the provisions needed in a contract. This is because there was a promise of paying a rate of ? 1 as rent annually. However, the rent rate did not equal the commercial rates; a contract was drawn that was legally binding. In these circumstances, we see that in contract laws need to have considerations that are sufficient but not adequate (Jenks, 2010). The argument of adequacy in relation to consideration is defined by the basic principle of contract laws. For a contract to be legally binding, a promise or offer has to be made which should be accepted by the other party. Therefore in the case of Thomas v Thomas (1842), both parties had agreed on the contract and the issues of adequacy cannot be raised in relation to consideration or legality of the contract (Atkins, 1999). Moreover, in the formation of contracts there is freedom of contracts whereby every party enters into the agreement based on mutual consent. The courts in most case will not interfere with a good contract even if one of the parties made a bad decision that cost him/her. This is because so long as consideration is placed in the process of drawing out the contract. But in most cases, consideration will not be sufficient if it has no economic value. There are several events under which the clause of consideration can be raised and in some instances they will not be honoured. For instance, if there was another contract drawn between parties that affect the current contract and this contract is recognized by the law. One example is that of a police officer or public officer who agrees to undertake certain duties to a member of the public in exchange of money. Such an agreement respects the principle of consideration buy it cannot be enforced in court of law (Chitty, 2006). This is because police officers are public officers and they are employed under a different agreement to give services to members of the public. The duties of the officer arise under obligations of the law and it breaches the other contract leading to nullification of these types of contract. Other types of contract that are looked at in the law of contracts are that of promises enforceable in the future. For instance, if a person promises to marry another person in the future then it should be noted the promised can be looked at afresh. In this case, a new consideration will be accepted and legally binding in the future. This event was witnessed in the case of (Shadwell v Shadwell (1860) whereby consideration was enforced with the change of terms. Past considerations are also looked into the formation of contracts in relation to consideration. In that consideration must be given after the promise to make the contract enforceable. This was witnessed in the case of Re McArdle (1951) whereby a promise was given when the consideration had already been undertaken. Handling past considerations in the laws of contract is very challenging, unless the acts which were undertaken for consideration were had been done under the promisor’s request. In some case, the parties could understand that was work had been undertaken and therefore the consideration would be lawful and enforceable (Elliott, 2007). Conclusion Consideration is very important in the formation of contracts within the English law as witnessed by the above examples. For a contract to be recognized as legally binding a consideration or promise has to go with the contract. Consideration is a term that has been used in the English law for a long period of time and it has been used to protect people involved in drawing out contracts. For a contract to be recognized under the English laws consideration has to be undertaken or agreed upon by the contracting parties. Consideration in English laws was designed to ensure that a benefit or detriment is incurred by either of the parties during the drawing up of the contract. In most cases, consideration has to be sufficient in that it has economic value although it needs not to be adequate. The principle of consideration has assisted in the enrichment of English contract laws but it has been difficult at times to enforce or interpret consideration in English laws. References Atkins, T., 1999. The History and Theory of English Contract Law. Chicago, IL: Routledge. Chitty, J., 2006. The Doctrine of Consideration in English Law. New York, NY: John Wiley and Sons. Cruz, P., 2008. The Doctrine of Consideration in English Law. New York, NY: Jones & Bartlett Learning. Elliott, C. and Quinn, F., 2007. Contract law. Sydney: Cengage Learning. Jenks, E., 2010. The History of the Doctrine of Consideration in English Law: Being the Yorke Prize Essay for the year 1891. London: Macmillan Publishers. Read More