Definition of Consideration
Consideration is the price paid for a promise. The classic definition comes from Currie v Misa (1875) LR 10 Ex 153: consideration is "some right, interest, profit or benefit accruing to one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other."
A more modern formulation from Dunlop Pneumatic Tyre Co v Selfridge [1915] AC 847 defines consideration as "an act or forbearance of one party, or the promise thereof, which is the price for which the promise of the other is bought." Every simple (non-deed) contract requires consideration to be enforceable.
Sufficiency vs Adequacy
Consideration must be sufficient (i.e., it must have some recognisable value in the eyes of the law) but need not be adequate (i.e., the court will not inquire into whether the bargain is fair). In Chappell & Co v Nestlé [1960] AC 87, the House of Lords held that chocolate wrappers could constitute part of the consideration for a record, even though they were of trivial economic value.
Similarly, in Thomas v Thomas [1842] 2 QB 851, a nominal rent of £1 per year was held to be sufficient consideration. The courts respect freedom of contract and will not assess whether the parties have made a good bargain.
However, consideration must have economic value. A promise motivated purely by natural love and affection is not sufficient consideration (White v Bluett [1853]). Nor is a vague promise to refrain from making complaints.
Past Consideration
The general rule is that past consideration is not good consideration. If the act was performed before the promise was made, it cannot be the price of that promise. In Re McArdle [1951] Ch 669, improvements made to a house before a promise to pay for them were held to be past consideration and therefore unenforceable.
The exception is the Lampleigh v Braithwait principle (also known as the implied assumpsit doctrine): where (1) the act was done at the promisor's request, (2) the parties understood that payment would be made, and (3) the payment would have been enforceable had it been promised in advance, then a subsequent promise to pay is enforceable. This was confirmed in Re Casey's Patents [1892] 1 Ch 104 and modernised in Pao On v Lau Yiu Long [1980] AC 614.
Existing Duty Rule
Performance of an existing duty is generally not good consideration for a new promise. This applies to duties imposed by law and duties owed under an existing contract.
Public duty: Performing a duty already imposed by law is not consideration (Collins v Godefroy [1831]). However, exceeding that duty can be (Glasbrook Bros v Glamorgan CC [1925] AC 270).
Existing contractual duty to the same party: The traditional rule from Stilk v Myrick [1809] 2 Camp 317 is that performing an existing contractual obligation owed to the promisor is not good consideration. However, the landmark case of Williams v Roffey Bros & Nicholls [1991] 1 QB 1 created a significant exception: where a party's promise to perform an existing duty confers a practical benefit on the promisor and the promise was not obtained by duress, the practical benefit constitutes good consideration.
Existing contractual duty to a third party: Performance of a duty owed to a third party can be good consideration for a new promise (Scotson v Pegg [1861]; confirmed in Pao On v Lau Yiu Long [1980]).
Promissory Estoppel
Promissory estoppel prevents a party from going back on a promise to accept less than they are owed, even without fresh consideration. The doctrine was established in Central London Property Trust v High Trees House [1947] KB 130 by Denning J.
The requirements are: (1) a clear and unequivocal promise or representation, (2) the promisee relied on the promise, (3) it would be inequitable for the promisor to go back on the promise. Crucially, promissory estoppel operates as a "shield, not a sword" — it can only be used as a defence, not to found a cause of action (Combe v Combe [1951] 2 KB 215).
The doctrine is generally suspensory rather than extinctive: it suspends rights rather than destroying them permanently (Tool Metal Manufacturing v Tungsten Electric [1955] 1 WLR 761). Rights can be revived by giving reasonable notice.
Key Cases
| Case | Key Principle |
|---|---|
| Currie v Misa(1875) | Classic definition of consideration as benefit/detriment |
| Chappell & Co v Nestlé(1960) | Consideration must be sufficient but need not be adequate |
| Williams v Roffey Bros(1991) | Practical benefit can constitute consideration for existing duty |
| Central London Property Trust v High Trees House(1947) | Promissory estoppel prevents going back on a promise to accept less |
| Re McArdle(1951) | Past consideration is not good consideration |
| Stilk v Myrick(1809) | Performing existing contractual duty is not consideration |
Exam Tips
Exam Tip
When analysing consideration, always check: (1) Is there consideration at all? (2) Is it sufficient? (3) Is it past? (4) Is it an existing duty — and if so, does Williams v Roffey apply? (5) If there's no consideration, could promissory estoppel apply as a defence?
Common Mistake
Students often forget that Williams v Roffey only applies to promises to pay MORE for existing duties. It does not apply to promises to accept LESS (part-payment of debts), which is still governed by the rule in Pinnel's Case and Foakes v Beer. For accepting less, you need promissory estoppel.