BetterLawNotes-5 (2)

CONTRACT LAW

Here D promises to pay C in return for C promising to do, or doing, something which C is already obliged to T to do.

A promise to do a thing which the claimant is already under a contractual obligation to a third party to do, or the doing of that thing, will amount to good consideration for a return promise by the defendant.

‘An agreement to do an act which the promisor is under an existing obligation to a third party to do, may quite well amount to valid consideration . . . the promisee obtains the benefit of a direct obligation which he can enforce.’

New Zealand Shipping Co Ltd v AM Satterthwaite & Co Ltd, The Eurymedon [1975] AC 154, 168 (Lord Wilberforce).

Scotson v Pegg (1861) 6 H & N 295

The claimant had contracted with T to deliver coal to T or to T’s order. T sold the coal to the defendant. The defendant then agreed with the claimant that if the claimant delivered the coal the defendant would unload it. The claimant sued the defendant for the defendant’s failure to perform its promise. Held: there was good consideration provided by the claimant for the defendant’s promise: the claimant had agreed to deliver to the defendant which was a benefit to it.

You cannot copy content of this page