Requirements for a valid contract
Offer
Acceptance
Intention
Consideration
All MUST be present for the contract to be valid
1.
2.
3.
4.
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Other requirements:
Capacity
Free Consent
Certainty of object
Possibility of performance
Consideration Definition
Benefit to promisor or detriment to promisee
Currie v Misa (1875)
Types of consideration:
1.Executory – a promise for a promise in the future
2.Executed – a promise for an act that is wholly performed at
the time of contract (usually seen in reward situations)
3.Past Consideration – promise of payment comes after the
act
Examples
 Are these consideration?
 1. “I Promise you $10 if it rains tomorrow!”
 2. “I promise you $10 if you pass your exam!”
Consideration
You cannot sue for breach of contract if there is no
consideration.
• Eg. If A promises to give B $100, B cannot sue A if A changes
his/her mind.
• A gift is not a contract, unless done by deed.
Rules of consideration (1)
1. Consideration does not have to be equivalent

Chappell & Co. Ltd v Nestle Co. Ltd. (1960)
2. Consideration must be sufficient. Not:

Natural love and affection - Bret v J S (1600):

Promise to do the right thing –White v Bluett (1853)
Rules of consideration (2)
3. Past consideration is not good consideration
 Re McArdle (1951) -Wife of son repaired house for father-
in-law who died. Document was signed by next of kin to pay
after sale of the house. Never paid.
 Lampleigh v Braithwait [1615] & Re Casey’s Patents (1892) –
Good consideration
 Consideration was by request
 Roscorla v Thomas (1842) – Not good consideration
 Receipt for horse after sale
Rules of consideration (3)
4. Already required to do so under contract - Stilk v Myrick
(1809
Exception; unsafe voyage: Hartley v Ponsonby [1857]
Both cases involved extra payment for crew members who
jumped ship
Existing Contractual Duty
Williams v Roffey (1990)
 When a party to an existing contract later agrees to pay an extra
"bonus" in order to ensure that the other party performs his obligations
under the contract, then that agreement is binding if the party agreeing
to pay the bonus has thereby obtained some new practical advantage or
avoided a disadvantage.
 In this case there were benefits to Roffey including
 (a) making sure Williams continued his work
 (b) avoiding payment under a damages clause of the main contract if
Williams was late
 (c) avoiding the expense and trouble of getting someone else. Therefore,
Williams was entitled to payment.
Third party consideration
Price v Easton (1833)
 John promises to pay Mary $20 if her son washes his car.
After Mary’s son washes John’s car, he decides not to pay.
 Can Mary sue John?
 Tweddle v Atkinson (1861) – Fathers of a couple getting
married promised to give the newlyweds a joint cash gift.
Both fathers died. Groom sued wife’s father’s estate.
Existing Statutory Duty
Collins v Godefroy (1831)
Godefroy promised to pay Collins if Collins would
attend court and give evidence for Godefroy. Collins
had been served with a subpoena. Collins sued for
payment.
Existing Public Duty
 England v Davidson (1840)
 £50 reward to 'whoever would give such information as should
lead to the conviction of the offender or offenders'
 Held: The duty of a police officer is the prevention of crime police officers are not under a duty to provide information
 Glasbrook Brothers Ltd. V Glamorgan County Council
(1925) – Request for police protection during strike
 Harris v Sheffield United Football Club (1987) – Large sums
of overtime had to be paid to police officers to police
football match
US Comparison:
Existing Public Duty
Gray v Martino (1918) – US
 Martino offered Gray, a police officer, a reward if he could
determine the identity of persons who had stolen her
jewellery. She refused to pay after receiving the information
 Held: Public policy forbids outside remuneration for official
duties performed by a public servant.
Part-payment of debt
Pinnel’s Case (1602)
 If you are bound to pay a certain sum of money, paying a
lesser sum does not discharge the debt even though the
creditor agrees.

If the Creditor changes his/her mind later and decides to sue
for the balance, he will be successful, because you have not
provided the consideration promised in the first place!
 Confirmed in Foakes v Beer (1884)
Part-payment of debt: Exceptions
1.
Early payment
2.
Substituted performance
3.
Payment of lesser sum in dispute of value of work performed
4.
Promissory estoppel
Promissory Estoppel
 When one party depends on the promise or conduct of another
and acts in his/her detriment in reliance on that promise.
 First established in: Hughes v Metropolitan Railway (1877)
 Clearly laid down in: Central London Property Trust Ltd v
High Trees House Ltd [1947]
 Fully restated and defined by Lord Denning in: Combe v
Combe [1951]
Intention
 The parties to a contract must intend to have a contract and
be legally bound by it
 Intention may be expressed, or implied by conduct
The Courts assume:
1. Parties to domestic & social agreements do not intend to
be legally bound
2. Parties to business agreements intend to be legally bound
Harvey v Facey [1893]
 Harvey: Will you sell us Bumper Hall Pen? Send lowest cash
price.
 Facey: Lowest cash price for Bumper Hall Pen is £900
 Harvey: We agree to buy Bumper Hall Pen for £900 asked by
you.
 Was there intention?
“Fun” transaction
An informal contract can contain formal intention
Simpkins v Pays (1955)