This essay discusses the implication of consideration when making and modifying a contract. I partly agree with this statement as I believe that consideration is taken into account in both forming a contract and modifying it but in a different/limited sense because in certain circumstances as enunciated through "Williams v Roffey Brothers", when partpayment of any debt is involved (Foakes v Beer) and when promissory estoppel is employed as shown in High Trees House.
The landmark "Currie v. Misa (1875)", elucidates "consideration" as follows: "a valuable consideration, in the sense of the law, may consist either in some right, interest, profit, or benefit accruing to the one party, or some forbearance, detriment, loss of responsibility given, suffered, or undertaken by others."
In certain circles, consideration is referred to as the "badge of enforceability." When the agreement comprises a promise to act and the exchange of commodities for money, this is crucial. As a result, it is very pertinent as for the creation of a valid contract when the execution of an act is a benefit to one of the parties, and a harm or loss incurred by the other party about the same act or one done at their end. It was in the case of Cook v. Wright (1861) that the legality of such a performance was established.
When it comes to the first part of a contract, the making of a promise is considered to be acceptable consideration. Within the common law authority "Dunlop Pneumatic Tyre Co. v. Selfridge & Co. Ltd" (1915), "Lord Dunedin" ruled that in a contract that has not been carried out in any way, making of a promise by either party equals consideration for that promise made by other party respectively.
To put it another way, the notion of consideration is nothing more than the need that something be contributed by both parties in a reciprocal manner.
Therefore, there must be consideration when parties engage into an agreement since mutuality and a meeting of the minds are fundamental requirements for the creation of a contract. since of this, there must be consideration.
It has been stated that the consideration provided by the courts is "sufficient," but it is not required to be "adequate." In most cases, the courts are not concerned with determining whether or not the value of what each party is offering is comparable to one another. "Thomas v. Thomas (1842)" would be the optimum example of this. Despite the fact that the value of paying the rent was relatively low in comparison to the whole rent, nevertheless. Both the party's commitment to make payment in exchange for living in the property and the fact that one pound was deemed to be "sufficient" enough to establish a right to reside in the residence were taken into consideration. If the rent was deemed to be "adequate," then it does not make a difference whether it was one pound or one hundred pounds.
Not only does consideration prove to be critical when it comes to the enforceability of the contract and the validity of its performance. But it also can be used in reference to the ‘freedom of making a contract‘. Lord Somervell in Chappell v Nestle (1960) uses the concept of ‘adequacy’, to address freedom of a contract. The reasoning at the backdrop being requisitioning to send in the wrappers would infact amplify their sal . So consideration not needing to be adequate prevents courts from giving an unfair judgement regarding the bargain being less than minimum because parties might have a reason and have a freedom of establishing whatever consideration of promise they may desire. This concept of consideration also then becomes useful when one party later demands something more than what was decided or attempts to exploit the other. Courts can then use this concept to enforce the fact that when deciding the terms of a contract, and establishing consideration of each promise is fully enforceable.
It is necessary to have a legal contract in order to amend obligations that are contractual or public. Additionally, it is not feasible to modify such a contract without taking into mind the situation. In the common law authority, "Stilk v. Myrick" (1809), it was highlighted that the long-standing concept of performing an existing contractual duty could never be a valid factor for a new performance. It was the sailors' responsibility to return the ship back to London as per the contract. Despite the fact that the captain may have stated that the pledge to pay further compensation may be enforced, the court decided that it is not possible to do so since the sailors were not exceeding their obligations in any way. In accordance with the precedent that was established in the case of Hartley v. Ponsonby, a fresh consideration to pay more is only enforceable if a party is performing something that goes beyond their contractual obligation, something that goes above and beyond. As a result, consideration will only be effective to a limited extent, depending on the specifics of the case and the modification provisions that are favourable to consideration.
The decision of Stilk v Myrick of only doing beyond one's contractual duty being fresh consideration was contradicted in the landmark common law authority of "Williams v Roffey Bros & Nicholls (Contractors) Ltd (1991)". It reiterated the view that when modification comes into play consideration works differently even if the facts of the case are very similar. Glidewell LJ in William v Roffey Bros stated a circumference of six points acting where the practical benefits approach applies which can then be considered good consideration. Hence consideration can be valid in certain circumstances, in terms of performance of already existing duty if a party is performing something that goes beyond their contractual obligation, something that goes above and beyond.
is absence of economic duress and consideration.
On the contrary, "MWB Business Exchange Ltd v Rock Advertising Ltd (2016)" put forth that the oral agreement was to be enforced as good consideration even if on face value it seems that accepting a lesser sum of money may not be seen as good consideration. The courts reasoned that the more limited view was because accepting a lesser sum on the actual date was equal to accepting more money on a deferred unsure date. There was also the practical benefit of the premises still being occupied in harsher circumstances even if a lesser sum of money is taken. Thus consideration works differently from case to case of modification of a contract because accepting a lesser payment was still beneficial as opposed to maybe never getting the full payment.
In addition, a distinct circumstance of alteration results in a difference in the application of consideration. In the case of Pinnel (1602), it was decided that if an additional item is performed, the entire obligation would be cancelled since the additional labour is seen to be of advantage to the other party. On the other hand, in "Foakes v. Beer (1884)", it was clarified that the payment of a smaller obligation would never be considered as compensation for a pledge to forego the entire total. The reason for this was that Mrs. Beers's pledge to forego the interest provided that Dr. Foakes eased the primary obligation by instalments was unjust since it gave no advantage and alluded to economic hardship, and thus cannot be considered good consideration.
Last but not least, promissory estoppel is still another scenario that makes it conceivable for modifications to be made in the absence of consideration. "Central London Property Trust Ltd. v. High Trees House Ltd. (1947)" is rightfully considered to be the inception of this notion. Denning argued that "a promise intended to be binding, intended to be acted upon, and in fact acted upon is binding so far as its terms properly apply." He concluded that the promise to take less during times of war was valid even if the tenants did not pay any recompense for the pledge of accepting less. The theory of consideration might be satisfied if the two parties reached an agreement to terminate the initial agreement and are mutually in agreement with one another. Promissory estoppel is the answer that equity offers since these methods are burdensome and thus supply the solution. In some situations, it is permissible for commitment to accept amended performance of contract that would bind the parties, even in the absence of compensation, and it acts as a substitute for consideration in order to make the amendment legally enforceable.
In conclusion, consideration is an integral aspect to be used when making a contract and then when modifying it, even though in modification its employment might be different
and limited when cases involve economic duress or a practical benefits approach is taken, or when there is promissory estopple involved.