Consideration and Privity of Contract Law A Level AQA

privity definition case

Consideration need be sufficient but not adequate - only need be real and of some actual value

If there is some value, consideration will be adequate.

What is sufficient, is for the party to decide.

Past consideration is not enough - cannot come after the act

However an exception to past consideration is if the importance of the task suggests implied payment.

Consideration must move from the promisee.

Existing duties do not count as consideration, unless it is added to in some aspect

Existing duties exception: Providing something extra (a benefit) is good consideration.

Existing duties exception: Where the party agreeing to pay more for an existing duty gains an extra benefit.

Basic rule = a promise to accept part payment for an existing debt in place of the whole debt cannot be enforced because there is no consideration of the promise.

1) Promise to pay a smaller sum ahead of time when the debt is due. 2)The creditor agrees to add something else to the payment. 3) Promissory estoppel - the offeror makes a promise that the offeree relies on.

Means that a contract cannot confer (give) rights or impose (force) obligations on someone who is not party to the contract.

Basic rule - promises are usually only enforceable by and against parties to contract

Exception of third parties: But this can be seen as unjust so it has limited use.

Exceptions to privity: collateral contracts - Court avoids privity by identifying a second - collateral contract.

3rd parties can enforce rights that they are given under the contract if: Contract expressly states so, Contract appears to offer benefit to 3rd party (Nisshin Shipping v Cleaves)