BetterLawNotes-5 (2)

CONTRACT LAW

There are many references in the caselaw to consideration comprising a benefit to the promisor and/or a detriment to the promisee.

‘A valuable consideration, in the sense of the law, may consist either in some right, interest, profit, or benefit accruing to one party, or some forbearance, detriment, loss, or responsibility given, suffered, or undertaken by the other.’ Currie v Misa (1875) LR 10 Ex 153, 162 (Lush J).

‘In order to constitute a binding promise, the [promisee] must show a good consideration, something beneficial to the [promisor], or detrimental to the [promisee]’ Wade v Simeon (1846) 2 CB 548, 564 (Tindal CJ).

‘Consideration means something which is of some value in the eye of the law, moving from the plaintiff; it must be some detriment to the plaintiff or some benefit to the defendant.’ Thomas v Thomas (1842) 2 QB 851, 859 (Patteson J).

‘The general rule is that an executory agreement, by which the plaintiff agrees to do something on the terms that the defendant agrees to do something else, may be enforced, if what the plaintiff has agreed to do is “either for the benefit of the defendant or to the trouble or prejudice of the plaintiff”: see Com Dig Action on the case in assumpsit, B 1.’ Bolton v Madden (1873) LR 9 QB 55, 56-57 (Lord Blackburn).

But, more recently, there are signs of a shift from any strict adherence to this requirement.

‘. . . I consider that the modern approach to the question of consideration would be that where there were benefits derived by each party to a contract of variation even though one party did not suffer a detriment this would not be fatal to the establishing of sufficient consideration to support the agreement. If both parties benefit from an agreement it is not necessary that each also suffers a detriment.’ Williams v Roffey Bros Ltd [1991] 1 QB 1, 23 (Purchas LJ).

Professor J C Smith expressed a clear preference for abandoning the benefit/detriment test in favour of the need for a request: 

 

‘The language of benefit and detriment is, and I believe long has been, out of date. So is the idea that consideration must be an economic benefit of some kind. All that is necessary is that the defendant should, expressly or impliedly, ask for something in return for his promise, an act or a promise by the offeree. If he gets what he asked for, then the promise is given for consideration unless there is some vitiating factor. Though lip service has been paid to the notions of benefit and detriment, they have no substantial meaning, in the light of the principle that the court will not inquire into the adequacy of the consideration.’

JC Smith The Law of Contract – Alive or Dead? (1979) 13 The Law Teacher 73, 77.

Smith goes on to cite the Nestlé case as supporting his views on benefit and detriment. He also refers to the enforceability of a promise of £100 if the promisee walks to York to show there is no requirement of economic value. 

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