INTRODUCTION :
In most contractual agreements,there are certain ingredients which must be present as to make It evident that no legal system treats all agreements as enforceable contracts. This is to make it certain, precise and binding. Such requirements are solely made by law and must be complied with. The idea of applying rules in a contractual relationship is based on requirement to guide and identify with the types of agreement which must be reflected in actualizing a binding contract. The question and needs rising from an offer made by parties in a relationship centers on its enforceability for the contract to be binding, there must be an offer made by one party to the other which in its nature, unequivocal as explained in the case of ''storer V Manchester city council''. Whereas commencement of the agreement with intention of being binding is made the basis of the agreement. So many other law authorities explains this rule.
Back to the main issue in contention, the key idea behind a successful agreement after a due offer has been made is consideration. What forms the basis of consideration?. this question has not only allowed for much debate in the world of contract but has given different writers the platform to define and explain the concept. The following are the definitions and thoughts on the idea of consideration.
According to Meckendreck, consideration was found to be the ''Badge of enforceability .
Also, Pollock further explained it to be the price for which a promise is bought.
According to the famous authority in CURRIE V MISA, LUGH, J explained consideration as;
''A valuable consideration in the eye of the law may consist either in some right, interest, profit, benefit accruing to the one party, or some forbearance, detriment, loss or responsibility being suffered or undertaken by the other.
These are some other views of writers on the concept to further the explanation on this. Consideration will not only consist of the benefit or profit when one party is made to enjoy but also some detriment or legal rights which one party must suffer. Thus, the rule of consideration must move from the promisee to the promissor. It should be noted that while consideration must move from the promisee, there is a requirement that it must move to the promissor. Thus, the promisee can provide consideration by conferring a benefit on a third party at the request of the promissor, however where there is no express request of performing an act of consideration by the promisee to the promisor or a third party, the consideration could be a past consideration and the rule of such consideration given is that such consideration will not be valid or binding no matter what detriment the promisee must have suffered. This was formally explained in the case of RE MACKDLE and the case of ROS CORLA V THOMAS. Where it was held that the defendants promise was unenforceable because the only consideration where the claimant had provided was his entry into the original contract of sale and that consideration was past. However, the court may sometimes accept a past consideration to be valid in some cases where it can be alleged that the past consideration are in fact part of the same overall transaction. This was fully explained in th case of CLASSIC MARITIME INC V LION DIVERSIFIED HOLDINGS BORHAD(2009)
Among the various rules of consideration i tend to center this discussion on the First Rule which has attracted a lot of concern among legal writers and indeed relevant in the build up of the doctrine of consideration. This rule is based on what constitute a valid consideration, sufficiency or adequacy?. These are two different concept which i tend to address as a point of concern in our legal world. Regarding the formal rule that consideration must be sufficient but not be adequate, the court will not enforce a promise unless something of value is given in return for the promise. On the other hand,the courts do not in general ask when adequate value has been given in return for the promise or whether the agreement is harsh or one sided.
This doctrine however has raised factual acts being held to constitute consideration. I consider the case of CHAPPELL AND CO V NESTlE(1960) Nestel offered for sale gramophone records in return for 1s 6d and the wrappers of the chocolate. The house of lords held that the wrappers themselves although of very trivial economic values were nevertheless part of the consideration. This was so even though Nestel threw away the wrappers as Lord Somarvell said a contracting party can stipulate for what consideration he chooses.
Based on the argument between Atiyah and Treital, Atiyah argued that the receipt of the wrappers was not a benefit but the motive which inspired the promise and therefore, a case in which the court should enforce the promise despite lack of benefit to the promisee. Treital replied this assertion saying that Atiyah failed to take into account the principle that the court will not investigate the adequacy of the consideration but considers it effective when something of value has been given. The critical question which must be asked is what does the law recognize as a thing of value?. The court has not adopted a consistent approach to identify a thing of value or benefit, however, in some cases such as FOAKES V BEER(1884),the court ignored a factual benefit obtained by a promisor and held that no consideration was provided because the promisor did not benefit from the consideration provided. In another case, COKE V WRIGHT(1861) the court has found the existence of consideration despite the apparent lack of either benefit to the promisor or detriment to the promisee. Some other cases have adopted an extremely subjective interpretation of benefit(bainbridge vs firmstone 1838) while in the case of (white vs bluett 1853), an objective view was adopted.
The emphasis in the important decision of the court of appeal case in WILLIAMS V ROFFERY BROS AND NICHOLLS(CONTRACTORS) LTD(1991) was based on the need to identify a practical benefit to the promissor rather than the benefit in the eyes of the law. But in all, these approaches has not been carried through into all aspects of the doctrine of consideration. One of the most difficult task in analyzing the doctrine of consideration is to stabilize the effectiveness of benefit and value in an agreement. This can be widely seen in the above cases listed especially the case of SHADWELL V SHADWELL (1860) where the court found the existence of consideration upon the availability of the best evidence which confirms professor Trietal's argument that in some cases the court has invented consideration. According to professor Atiyah there is no coherent doctrine of consideration based on reciprocity. he states that;
''The truth is that the court has never set to create a doctrine of consideration, they have
been concerned with much more practical problem of deciding in a course of litigants
whether a particular promise in a particular case should be enforced .When the court
found a sufficient reason for enforcing a promise,they enforced it. And when they
found that for one reason or another it was undesirable to enforce a promise,they
did not enforce it. It seems highly probable that when the court first used the word
"consideration", they meant not more than there was a reason for the enforcement of
the promise. If the consideration was good, this meant that the courts has sufficient
reason for enforcing the promise''.
Professor Trietal however questioned the above assertion by professor Atiyah. He argued that English law recognizes the existence of the complex and multifarious rule known as the doctrine of consideration. He continued that consideration means a reason for the enforcement of a promise and maintains that such preposition is a negation of existence of any applicable rule because it does not reveals the circumstances in which the court will find the existence of such a good reason. He however admits that in some cases the court has to invent consideration i.e the court has treated some acts as consideration irrespective of the question whether parties have so regarded it.
The difference between the schools of thoughts is that Trietal believes in benefit and detriment which one party must suffer or gain in the contract while Atiyah maintains that there are other good reasons for the enforcement of a promise. The importance of this argument is based on achieving a rule to ensure a binding and enforceable contract.
Finally, it must be understood that the court do not intend to employ a common language for what must constitute benefit and detriment. Following Nigeria's authority especially in Sagay's "Nigerian law of contract", judges have been content to deny the name of consideration to certain acts or promises without attempting to generalize the idea in cases which might arise. More recently, J.C SMITH in support of this view contends that in the interest of morality and public policy, any act or promise accepted by one party to a contract as a price for his own act or promise constitute a good consideration. This is emphasized to be that consideration does not have to be of economic value. once it is clear that it is what the defendant requested, then it is a valuable consideration. The inconsistency therefore is unresolved and the conclusion which must be reached is that the English court has bind the theory of consideration upon the foundations of benefits and detriment without subjecting to stringent analysis on the coherence of the concept of benefit and detriment...
Back to the main issue in contention, the key idea behind a successful agreement after a due offer has been made is consideration. What forms the basis of consideration?. this question has not only allowed for much debate in the world of contract but has given different writers the platform to define and explain the concept. The following are the definitions and thoughts on the idea of consideration.
According to Meckendreck, consideration was found to be the ''Badge of enforceability .
Also, Pollock further explained it to be the price for which a promise is bought.
According to the famous authority in CURRIE V MISA, LUGH, J explained consideration as;
''A valuable consideration in the eye of the law may consist either in some right, interest, profit, benefit accruing to the one party, or some forbearance, detriment, loss or responsibility being suffered or undertaken by the other.
These are some other views of writers on the concept to further the explanation on this. Consideration will not only consist of the benefit or profit when one party is made to enjoy but also some detriment or legal rights which one party must suffer. Thus, the rule of consideration must move from the promisee to the promissor. It should be noted that while consideration must move from the promisee, there is a requirement that it must move to the promissor. Thus, the promisee can provide consideration by conferring a benefit on a third party at the request of the promissor, however where there is no express request of performing an act of consideration by the promisee to the promisor or a third party, the consideration could be a past consideration and the rule of such consideration given is that such consideration will not be valid or binding no matter what detriment the promisee must have suffered. This was formally explained in the case of RE MACKDLE and the case of ROS CORLA V THOMAS. Where it was held that the defendants promise was unenforceable because the only consideration where the claimant had provided was his entry into the original contract of sale and that consideration was past. However, the court may sometimes accept a past consideration to be valid in some cases where it can be alleged that the past consideration are in fact part of the same overall transaction. This was fully explained in th case of CLASSIC MARITIME INC V LION DIVERSIFIED HOLDINGS BORHAD(2009)
Among the various rules of consideration i tend to center this discussion on the First Rule which has attracted a lot of concern among legal writers and indeed relevant in the build up of the doctrine of consideration. This rule is based on what constitute a valid consideration, sufficiency or adequacy?. These are two different concept which i tend to address as a point of concern in our legal world. Regarding the formal rule that consideration must be sufficient but not be adequate, the court will not enforce a promise unless something of value is given in return for the promise. On the other hand,the courts do not in general ask when adequate value has been given in return for the promise or whether the agreement is harsh or one sided.
This doctrine however has raised factual acts being held to constitute consideration. I consider the case of CHAPPELL AND CO V NESTlE(1960) Nestel offered for sale gramophone records in return for 1s 6d and the wrappers of the chocolate. The house of lords held that the wrappers themselves although of very trivial economic values were nevertheless part of the consideration. This was so even though Nestel threw away the wrappers as Lord Somarvell said a contracting party can stipulate for what consideration he chooses.
Based on the argument between Atiyah and Treital, Atiyah argued that the receipt of the wrappers was not a benefit but the motive which inspired the promise and therefore, a case in which the court should enforce the promise despite lack of benefit to the promisee. Treital replied this assertion saying that Atiyah failed to take into account the principle that the court will not investigate the adequacy of the consideration but considers it effective when something of value has been given. The critical question which must be asked is what does the law recognize as a thing of value?. The court has not adopted a consistent approach to identify a thing of value or benefit, however, in some cases such as FOAKES V BEER(1884),the court ignored a factual benefit obtained by a promisor and held that no consideration was provided because the promisor did not benefit from the consideration provided. In another case, COKE V WRIGHT(1861) the court has found the existence of consideration despite the apparent lack of either benefit to the promisor or detriment to the promisee. Some other cases have adopted an extremely subjective interpretation of benefit(bainbridge vs firmstone 1838) while in the case of (white vs bluett 1853), an objective view was adopted.
The emphasis in the important decision of the court of appeal case in WILLIAMS V ROFFERY BROS AND NICHOLLS(CONTRACTORS) LTD(1991) was based on the need to identify a practical benefit to the promissor rather than the benefit in the eyes of the law. But in all, these approaches has not been carried through into all aspects of the doctrine of consideration. One of the most difficult task in analyzing the doctrine of consideration is to stabilize the effectiveness of benefit and value in an agreement. This can be widely seen in the above cases listed especially the case of SHADWELL V SHADWELL (1860) where the court found the existence of consideration upon the availability of the best evidence which confirms professor Trietal's argument that in some cases the court has invented consideration. According to professor Atiyah there is no coherent doctrine of consideration based on reciprocity. he states that;
''The truth is that the court has never set to create a doctrine of consideration, they have
been concerned with much more practical problem of deciding in a course of litigants
whether a particular promise in a particular case should be enforced .When the court
found a sufficient reason for enforcing a promise,they enforced it. And when they
found that for one reason or another it was undesirable to enforce a promise,they
did not enforce it. It seems highly probable that when the court first used the word
"consideration", they meant not more than there was a reason for the enforcement of
the promise. If the consideration was good, this meant that the courts has sufficient
reason for enforcing the promise''.
Professor Trietal however questioned the above assertion by professor Atiyah. He argued that English law recognizes the existence of the complex and multifarious rule known as the doctrine of consideration. He continued that consideration means a reason for the enforcement of a promise and maintains that such preposition is a negation of existence of any applicable rule because it does not reveals the circumstances in which the court will find the existence of such a good reason. He however admits that in some cases the court has to invent consideration i.e the court has treated some acts as consideration irrespective of the question whether parties have so regarded it.
The difference between the schools of thoughts is that Trietal believes in benefit and detriment which one party must suffer or gain in the contract while Atiyah maintains that there are other good reasons for the enforcement of a promise. The importance of this argument is based on achieving a rule to ensure a binding and enforceable contract.
Finally, it must be understood that the court do not intend to employ a common language for what must constitute benefit and detriment. Following Nigeria's authority especially in Sagay's "Nigerian law of contract", judges have been content to deny the name of consideration to certain acts or promises without attempting to generalize the idea in cases which might arise. More recently, J.C SMITH in support of this view contends that in the interest of morality and public policy, any act or promise accepted by one party to a contract as a price for his own act or promise constitute a good consideration. This is emphasized to be that consideration does not have to be of economic value. once it is clear that it is what the defendant requested, then it is a valuable consideration. The inconsistency therefore is unresolved and the conclusion which must be reached is that the English court has bind the theory of consideration upon the foundations of benefits and detriment without subjecting to stringent analysis on the coherence of the concept of benefit and detriment...
Written by; Mube Ajuri Wilo
For: www.lawfaqs.blogspot.com
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