Obligations under a Contract - Case Study Example

Contract Law The issue in respect of consideration, whether existent acts stipulated within a contract can act as good consideration and past consideration. Consideration has been developed by English law so as to determine legal enforceability of a contract. McKendrick states that the purpose of consideration is to give the ‘badge of enforceability’ to agreements. Currie v. Misa1 defined the concept of consideration whereby it was said that consideration revolves around the concept of benefit to the promissor, or detriment to the promisee, thus the requirement is mutually exclusive. An important principle is that consideration must be sufficient and need not be adequate that is it must be something which the court would consider to be legally capable of constituting consideration. (Thomas v. Thomas)2 The position in respect of existing obligations under a contract and whether they can act as good consideration will now be discussed. One of situation is the one where variation of existing obligations under a contract between the parties occurs.The principle has been modified but the extent to which such modification applies remains unclear. The long established principle in respect of variation of terms and promises in that respect was that of Stilk v. Myrick3whereby it was a long accepted principle that if there was an existing contractual obligation it could never be relied upon that is it could not as good consideration for a fresh promise with the person to whom the existing obligation was owed.. The decision of Stilk and it being good law is doubtful after the case of Williams v Roffey Brothers4the facts of the case were that carpenters, plaintiff, while doing their work, asked the defendants for additional amount of money to finish the work even though they were no doing anything more than what they were already obliged to do. After completion of the work the defendants refused to pay the plaintiff. The main argument that was put forward was that there had been no consideration for the defendants’ promise to pay the additional amount and the decision of Stilk and its application would lead to the promise being construed unenforceable. However, the Court of Appeal found that that plaintiff’ could recover the promised payments for completion of work of the flats, the Court gave a broader meaning to consideration than what had been previously given. The reasoning of Glidewell LJ in particular referred to the point of ‘practical benefits’ which were likely to have accrued to the defendants as a result of them paying the additional promised amount of money, these were that such a promise ensure that the plaintiffs stayed and continued work thus the contract was completed; the defendants avoid the penalty clause which they were bound to pay under a separate contract with the owners of the block of flats; and finally the defendant avoided the trouble and expenses that would have accrued for finding other carpenters so as to get the work completed. The decision has been criticized because of its resemblance to the facts of Stilk where practical benefits that had been derived as well. Thus the only difference that has been seen in respect of both the cases is there was no pressure put on the defendants in Williams so as to get an offer for additional payment. Thus the effect of such a promise of additional payment and work which is done in response to such a promise, which has already been contracted to can be enforced if it is done in response to a promise. Glidewell LJ provided for the circumstances of practical benefits and emphasized that there need not be economic duress and fraud; however, it has been argued that the courts would not be restricted to the criteria laid down in his judgment. In respect of the current situation at hand it can be seen that Angela is that Philip in no way pressurized Angela and she offered the additional payments and derived the benefits stipulated in Williams and so she would be liable to pay the additional 400 and cannot refuse to do so as per the decision of Glidewell LJ. In respect of the situation of Colleen the principle of Currie and Thomas need to be applied whereby it needs to be determined whether the complaints would constitute to be good consideration. In respect of the situation it can be said that this would be considered to be sufficient and so the courts would allow Collen to claim the payments as she has stopped complaining In respect of consideration another important principle is that it must generally be given after promise so as to make it enforceable. Thus a promise made after alleged consideration is complete is unenforceable (Re Mcardle)5. Thus past consideration is generally held not to be good consideration and this had been the contemporary practice. However, the courts in Pao On v. Lau Yiu Long whereby Lord Scarman laid down the three condition which were to be satisfied if the exceptions were to be relied upon and past consideration to constitute as good consideration, the first being that the act which was done must have been done at the request of the promisor; secondly the parties had understood that the work was to be paid for in one way or the other, which could have been by way of money or other benefit; finally the promise would be legally enforceable had it been made prior to the acts which constituted consideration. The most difficult of the condition would be the anticipation of payment. In respect of the current situation it can be seen that Angela promised John the amount of 100 after he had finished with his placement and so a claim cannot be made under Re Mcardle. As fat as Pao on is concerned John needs to satisfy the three conditions, and as per the facts the acts were clearly not done on the request of the promisor that is Angela; secondly it was in no way a paid work experience and so the second condition would also not be satisfied; and finally the final condition cannot be satisfied as the acts of John had been done before the promise and so these could not constitute as good consideration, thus no payments can be claimed by John. References McKendrick, Ewan. Contract Law: Text, Cases, and Materials. Oxford: Oxford University Press, 2010. Print Read More