Part formation whereby each party must benefit
or bare detriment -- must be something of value
in the eyes of the law
Wright: Doctrine of Consideration to be Abolished
from the Common Law?
1. Anson -- regards
importance of single
test: 'consideration is
the only test of the
intention of the
promisor to bind himself
by a contract.'
Countries not in the common law
which don't have consideration
doctrine (e.g. France, South Africa).
France focusses on cause, rather
than consideration. Cause can inc.
motive/impulse of
charity/generosity.
In Australia, causar represents economic purpose of contract
-- a promise with no apparent economic advantage is not
honoured
2. Wright -- suggests doctrine is a 'mere encumbrance'. Is it right
that the law only recognises 'value' as relevant factor for
consideration? Wright says this should be a question of fact in each case.
3. Sir William Holdsworth -- proposes reform so that contract can
be enforced by law if in writing or if there is consideration. If you
allow this, gratuitous promises may be enforced if they are in
writing.
Atiyah: Essays on Contract
1. Consideration as a doctrine does not exist as such, means by which
the courts can establish which promises they will and won't enforce
Consideration is the collective view of judges based largely on conditions and moral values of the time
Will this/can this change in light of, for example, commerce?
2. Treitel -- Courts have power to invent
consideration. NB Atiyah believes that 'invented'
consideration is the same as current consider.
Consideration = reason for enforcement of promise
Little to do with justice or
desirability of enforcing the
promise or recognising
obligations
Presence of benefit and detriment not required
This being said, dubious about whether
promises should be enforced
'It may concieveably be found desirable to enforce gratuitous
promises in a much wider way than at present, but not to the
same extent as ordinary commercial promises...in short, we
must look at the reasons (or considerations) which make it
just or desirable to enforce the promises.'
Abolition of consideration is nonsensical --
would end up starting from scratch
Patterson: An Apology For Consideration
Lord Wright in 1936: urged for abolition of
consideration. Wanted introduction of test
which asked the question did the promisor
at the time of contracting do so with a
deliberate mind to contract?
'I cannot resist the conclusion that the doctrine is a 'mere encumbrance'. A
scientific or logical theory of contract would, in my opinion, take as a test of
contractual intention, the answer to the overriding question whether there
was a serious and deliberate intention..to make a binding contract...There is
no public policy that I can see against enforcing gratuitous obligations.'
Patterson defends by arguing that consideration provides a
method assuming a legal obligation for persons who are not
thinking of legal consequences
Exchanges common in our society, consideration therefore a
means of protect to those who aren't thinking about legal
implications
Consideration method of achieving freedom of contract
Protects parties from flimsy and unfounded claims for contract
Consideration currently doesn't look at the intention of parties -- good thing because it promotes
freedom of contract better than substitute of 'deliberate intention to be bound'
Not defended as perfect legal device -- promissory estoppel should be expanded by judiciary to fill gaps