Common law For a contract promise to be enforceable, that promise must normally be supported by consideration. Any contractual promise must be supported by consideration unless an exception applies. Second, the promiser or 3rd party should receive some act forbearance or return promise.
Traditionally, the doctrine of consideration was used as a promise without any agreement to support it Melvin, The instability of the courts to have a standard definition of consideration has led to greater criticisms of the doctrine.
The doctrine of consideration emanates from the contract of promise and this creates a moral obligation to its maintenance. A strict requirement for consideration unduly limits the law of contract to promises given for value and can frustrate the expectations and legitimate intentions of the parties.
The purpose of consideration can be argued from different perspectives; from the bargain theory, as a formality, and from the realist interpretation. The existence of consideration is appropriate in distinguishing between unilateral obligations and contracts. Hence, consideration must be present in the creation of a legally enforceable contract.
The interpretation of consideration acknowledges that the courts have frequently, though changeable, adopted a functional approach to the findings of consideration bargain.
The primary importance of consideration is as a valuable indicator of the parties intending to be bounded by their agreement, rather than an end to itself. When entering into a consideration, the intentions should be made clear while entering the legal relations as any changes or variation to the agreement should be bounded Walker, Better returns or positives can be achieved if consideration is used in the right manner.
Hence, consideration should not be eradicated in contracts while the modern courts should also find its existence to reflect the intention to the parties of the contract. Consideration Introduction The principle of consideration is one of the most debated aspects of the law of contract in common law jurisdictions.
Despite its criticism, it remains as a necessity for the formation of contracts not in deed form. Contracts due to the doctrine of consideration are largely restricted to the territory of bargains involving an exchange of value between two parties Val, Contract theory understanding is essential in the evaluation of the consideration requirement.
An agreement made in the absence of consideration and not made in deed is not binding. A strict requirement for consideration unduly limits the law of contract to promises given for value and can frustrate the expectations and legitimate intentions of the parties Trebilcock, Generally, consideration is an essential prerequisite for contract formation while the law in the contract is only meant for mutual exchanges.
Consideration which means the value is used in exchange of value. Traditionally, the doctrine of consideration is defined as either a benefit to the promisor or detriment to the promisee; promise without any agreement to support it Val, Consideration may consist of some interest, right, benefit or profit accruing to one party.
On the other hand, it may consist of detriment, forbearance, responsibility or loss suffered, undertaken or given by the other party. The instability in scope and definition grants courts considerable freedom in settling on the enforceability of any promise.
This has aggravated criticisms of the doctrine. The main aggravation results from consideration merely signifying conclusion rather explaining why a promise in the agreement is enforceable. The interpretation of consideration acknowledges that the courts have frequently, though changeable, adopted a functional approach to the findings of consideration bargain Trebilcock, A contract entails a promise or promises prepared in a manner in which the law recognises it as reasonable; which can take on a legally binding obligation Melvin, The plain act of promising creates a moral obligation to maintenance of the promise.
Therefore, individuals should understand that the contracts are not enforced just because they engage promises. The act of promising creates an obligation to keeping the promise.
For instance, consideration is given for the promise to transfer title to the property in a sale with an ordinary contract. This can involve a promisee to pay the actual payment or purchase price.
A new promise that is not sustained by the new consideration is not enforceable since past consideration is insufficient Walker, This shows that the common law develops its concept of contract from commercial transactions.
The purpose of consideration can be argued from different perspectives. From the bargain theory, consideration is perceived to be recognized from the common law of contracts and is only concerned with bargains.
In this case, the promise and consideration are considered to be mutually inducing. This shows that consideration must be bargained as it is sought by the promisee in exchange for the promise Schwartz, Promises in economic terms do not involve any exchange that is worth enforcing, and this makes bargain theory inadequate as it not only describes the current law but does not explain which promises should be enforced as contracts.
Consideration can also be considered as a formality. Legal formalities serve three functions; provide evidence of the content of promise or an agreement, as a cautionary measure and fulfils a channelling function to the promise having legal consequences Walker, Though the court does not distinguish between real and nominal consideration, it suggests that the function of consideration is simply to act as an evidence of bound intention.
Neither deeds nor nominal consideration fulfil any substantive function, yet both are viewed by the legislature and the courts as sufficient substitutes for a concrete exchange of value.
From the English Law, it is recommended that consideration is not required if the promise is in writing and amounts to sufficient evidence of intent Atiyah, The history of the doctrine of consideration in English law: being the Yorke prize essay for the year Item Preview remove-circle Share or Embed This Item.
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The doctrine of consideration is based upon the idea that a promisee must give or promise to give something in return for the promise or unless the promisor has obtained or been promised something in return. The history of the doctrine of consideration in English law: being the Yorke prize essay for the year Author: Edward Jenks.
The History of the Doctrine of Consideration in English Law Being the Yorke Prize Essay for the Year Originally published: London: C.J.
Clay and Sons, viii, pp. Reprinted by The Lawbook Exchange, Ltd. ISBN Should English Law Abolish The Doctrine Of Consideration? Essay - If English law decided to abolish the doctrine of consideration it would rely on alternative methods such as promissory estoppel to replace the role of consideration in filtering out non-contractual agreements.
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