Consideration Cases
These cases illustrate how the courts dealt with past services, promises to pay more, existing duties and benefits supplied by someone outside the agreement.
Re McArdle [1951] Ch 669
Improvements had been made to a house forming part of an estate. Afterwards, the beneficiaries signed a document promising payment out of the estate for that work. The Court of Appeal held that the promise was not contractually enforceable: the work had already been completed before the promise was made. It was past consideration, rather than something supplied in exchange for the later promise.
Lampleigh v Brathwait (1615) Hob 105; 80 ER 255
After killing a man, Brathwait asked Lampleigh to endeavour to obtain a royal pardon. Lampleigh travelled and incurred expenses in carrying out that request. Brathwait subsequently promised him £100 but did not pay.
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The court gave judgment for Lampleigh. His services were connected to Brathwait’s earlier request, so the later promise was not merely a reward for an unsolicited favour. The report expressly distinguishes undertaking to try to obtain the pardon from guaranteeing that it would be obtained.
Re Casey’s Patents; Stewart v Casey [1892] 1 Ch 104
A promise to give Casey a one-third share in patents followed services he had already provided. The court upheld the promise. Bowen LJ explained that where services were rendered on an understanding that they would be paid for, a later promise could evidence or fix the remuneration originally contemplated. The services were not treated as a completed gift simply because the amount of payment was settled afterwards.
Pao On v Lau Yiu Long [1979] UKPC 17; [1980] AC 614
The Paos agreed to retain shares received in a corporate transaction, with protection against a fall in their value. A later indemnity replaced the original protective arrangement. The Privy Council held that the indemnity was supported by consideration and restored judgment for the Paos.
Lord Scarman identified three requirements for an earlier act to support a later promise: the act must have been requested by the promisor; both sides must have understood that payment or another benefit would be given; and that benefit must have been legally enforceable if promised beforehand. An earlier request alone was insufficient. The Board also rejected the economic-duress defence on the facts.
Chappell & Co Ltd v Nestlé Co Ltd [1959] UKHL 1; [1960] AC 87
Nestlé offered records for 1s 6d and three chocolate wrappers. Chappell, the exclusive licensee of the musical copyright, and its owner challenged the scheme. By a majority, the House of Lords held that the wrappers formed part of the consideration even though Nestlé discarded them. Their delivery was a stipulated part of the promotional bargain.
The statutory copyright notice stated only the money price and did not satisfy the requirements of section 8 of the Copyright Act 1956. The appeal therefore succeeded. The case illustrates why consideration need not have substantial monetary value.
Price v Easton (1833) 4 B & Ad 433; 110 ER 518
Easton promised a debtor that, in return for the debtor’s work and leaving his earnings with Easton, Easton would pay the plaintiff. The work was performed, but the plaintiff was not paid.
The plaintiff’s claim failed. He had supplied no consideration, and the declaration did not establish contractual privity or a promise made to him. The court arrested the judgment notwithstanding the verdict initially obtained in his favour.
Alliance Bank Ltd v Broom (1864) 2 Dr & Sm 289
A bank demanded security for an existing debt. The debtor promised security but then resisted enforcement on the ground that the bank had given no consideration. Although it had not expressly promised to postpone recovery, the bank actually refrained from enforcing payment in consequence of the arrangement. That forbearance supplied consideration for the promise of security. The decision depended on the benefit of actual forbearance, not simply on the existence of the earlier loan.
Collins v Godefroy (1831) 1 B & Ad 950; 109 ER 1040
Collins, an attorney subpoenaed as a witness in a civil action, attended court for six days without being called to give evidence. He sought six guineas for his lost time. The court held that attendance under subpoena was a legal duty. Even assuming a promise of payment, performing that duty supplied no consideration for compensation for lost time. His claim failed.
Glasbrook Brothers Ltd v Glamorgan County Council [1924] UKHL 3; [1925] AC 270
Colliery owners requested a resident police garrison during a strike and agreed to pay for it. The police considered their existing arrangements, including a mobile force, sufficient. The House of Lords upheld the payment agreement by a majority.
The additional protection went beyond what the police reasonably and in good faith considered necessary to discharge their public duty. Providing it supplied consideration. The decision did not permit charging for protection the police were already obliged to provide, or diverting officers from necessary duties elsewhere.
Stilk v Myrick (1809) 2 Camp 317; 170 ER 1168
Two sailors deserted during a voyage. The captain promised the remaining crew the deserters’ wages if replacements could not be found. The ship returned with the reduced crew, but the extra payment was refused.
Lord Ellenborough held that the sailors’ existing agreement required them to meet such emergencies and bring the ship safely home. They supplied no fresh consideration for the extra wages. Stilk could recover only his original contractual rate.
Hartley v Ponsonby (1857) 7 El & Bl 872; 119 ER 1471
Desertions left a ship so short-handed that continuing the voyage was unsafe. The captain promised extra payment to the remaining sailors, and the jury found that he made the agreement without coercion.
The court upheld the sailor’s claim. He was not bound by the original engagement to continue in those dangerous conditions and was free to make a fresh bargain. His undertaking to proceed therefore supplied consideration for the additional payment.
Williams v Roffey Bros & Nicholls (Contractors) Ltd [1989] EWCA Civ 5; [1991] 1 QB 1
Building contractors promised a struggling carpenter additional payments to help secure timely completion of his existing subcontract. The Court of Appeal found consideration in the practical benefits to the contractors, including avoiding delay penalties and the trouble of finding replacements.
Glidewell LJ’s formulation expressly required the promise not to result from economic duress or fraud. The court did not abolish the requirement for consideration. It also upheld payment for substantially completed flats, subject to deductions for defects and omissions, and dismissed the contractors’ appeal.
Scotson v Pegg (1861) 6 H & N 295; 158 ER 121
The plaintiffs delivered coal to Pegg, who promised to unload it at an agreed daily rate. Pegg argued that they already owed a third party a contractual duty to deliver the coal to him.
The court gave judgment for the plaintiffs. Delivery benefited Pegg and could support his promise even though it also fulfilled an obligation owed to someone else. The judges distinguished an existing duty to a third party from a duty owed to the person making the new promise.
Judgments and reports
The report citations appear with each case above. Judgment texts are available for Lampleigh, Pao On, Chappell, Collins, Glasbrook, Stilk, Williams and Scotson.
