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Consideration in Oral and Written Contracts

Info: 2902 words (12 pages) Essay
Published: 20th Aug 2019

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Jurisdiction / Tag(s): Commonwealth law

Consideration is the important things in a part of oral and written contracts. A collateral contract is the agreement that two or more parties but it does not the main contract which require the consideration to enter to the main contract. [1] It has been said that most contracts have to need the consideration. This essay will describe to relevant case laws by using the case from books, website, and some articles.

Contacts are defined as the statement that made by one party to encourage or persuade the others to participate into the contract which obligate only by its terms but not by external utterances that have been made. [2]

Collateral contract is defined as “A collateral contract is a separate contract which exists alongside or parallel to the main contract. One use of collateral contract is to get around the parole evidence rule”. [3] Moreover, the Law Handbook indicated that “where statements have been made and intended as a promise, and intended to induce the main contract, a collateral contract will be held to exist.” [4]


In order to comprehend and classify the term of collateral contract require the form of consideration. This essay will analyze and explain the together with the relevant case laws.

There are cases that discuss about the collateral contract. Shepperd v Municipality of Ryde, for instance, as plaintiff was buying the house from the Local Council. The council mentioned that they would construct park near plaintiff’s house so the plaintiff decide purchase house immediately. However, there was no contracts mention for park. It can be seen that the Local Council made the collateral contact to motivate the buyers purchase house. [5] Regarding to the case, there are the promise of one party to persuade the other parties made the main contract by providing the collateral contract. [6] In his case is an argument that there is the consideration in the collateral contract which relate with the main contact. [7]

Moreover, Hoyt’s Pty Ltd v Spencer is another example of collateral contract. It is mentioned that “A distinct collateral agreement, whether oral or in writing, and whether prior to or contemporaneous with the main agreement, is valid and enforceable even though the main agreement be in writing, provided the two may consistently stand together so that the provisions of the main agreement remain in full force and effect notwithstanding the collateral agreement.” [8] In addition, the consideration may happen at the same time with main contract as well as relate with collateral contract. [9]

Dean v Gibson is one of the examples of collateral contract. To sell land by making the special condition as erect a dwelling. After they made contract found that erect dwelling without permission from the authorities. [10] “In any case, an undertaking by the defendant to procure a permit for erection of the dwelling ought to be implied in the circumstances of the case as collateral to the main contract.” [11]


The collateral contract requires consideration to make another contract that may come before or after main contract. Collateral contract can be both oral and written contract to motivate someone to agree to do something. Someone may enter to the main, they may consider for the collateral contact as well. Moreover, collateral contract is coexisting with the main contract.

Question 2


Finders are keepers can describe in the term of laws as property. In term of losing any holdings, someone can collect the properties who call finders and keepers. Anyway, it is not always correct that finders are keepers. Therefore in term of Laws of this essay, the possession of other’s properties cannot define as finders and keepers. Hence, the purpose of this essay will explain the law that concern to possession other’s properties; finders are not keepers which refer to the case law.

The concept of possession is similar with proprietorship. However, “it is generally accepted that possession, in law, means the physical control of a thing coupled with an intention to exercise continuing control over it.” [12] The physical control can be the tangible things as well as can control them directly or indirectly. [13]

The meaning of finders is somebody who found the other’s property as well as uses them as ownership as well as it can with or without get permission from the true owner. [14]

Cases and analysis

There are cases that refer to the possession and finders. Chairman, National Crime Authority v Flack, for example, the case stated that a suitcase have money that found in the house. In this situation the owner of the house is the true possession of that briefcase even the true owner is unaware of this matter. [15] Moreover, the decision mentioned that “The trial judge Hill J held that Mrs. Flack had sufficient title to sue in conversion. All other element of the tort had been made out. The Commonwealth was ordered to deliver up to Mrs. Flack the briefcase and cash. This order was affirm by a majority of the Full Federal Court.” [16]

Another example, Parker v British Airways Board, one of travelers found the bangle on the floor in the airline’s international lounge. [17] The consideration of this case was “the finder’s right to sue for the bracelet’s value prevailed because the airline could not show that it intended to exercise control over the lounge and all things in it.” [18] The traveler won in this case by calling for damages being assessed the process with £850 as well as £50 of interest which affirmed by The Court of Appeal. [19]

What is more, the employees who include agent can be finders as well. If finding something that may or may not find the real owner, it must belong to employers if staff are working in the office hour. [20]

Willey v Synan, for instance, the ship captain found the English silver coins on board on the voyage which possess by authorities. [21] The boatswain who was plaintiff, claimed being as a finder. However, the consideration was “At the trial of the action before Starke J, evidence was given by an employee of the ship’s agents of a report to him by the captain of the ship that the coins had been found on board by the plaintiff and handed over to the captain, but the plaintiff did not give evidence himself and there was no direct evidence on oath that the plaintiff found the coins. [22]

There are two cases that finders will not acquire legal procession that is if someone found something on someone else’s property, this situation, the right possession is the employer. [23] Moreover, finders who found something on the owner’s land which may or may not connect under or on it land; it is still belonging to the true owner. [24]


Finders are not always keepers. In the term of law, it is the possession of someone else’s objects that can be the tangible objects. It is depending on the circumstances and the evidence that can prove by them. However, in case of employees are finders, if the staff find something during their work, the possession would be the employer’s property.

Question 3


Dose John will succeed to against Peter and/or the Club in the legal proceedings?


Civil Liability Act 2003 – Section 9 General principles mention that “A person does not breach a duty to take precautions against a risk of harm unless – the risk was foreseeable that is, it is a risk of which the person knew or ought reasonably to have known and the risk was not insignificant as well as in the circumstances, a reasonable person in the position of the person would have taken the precautions.” [25] The consideration of the court would as lack of care that causes to injure, the possibly earnest of injury, there are some burden of protection to evade risk of damage, and the social activities that make risk of hurt. [26]

A decision of contravene of duty is in Section 11 of Civil Liability Act 2003, it is including the breach of duty in circumstance of injure or factual causation and it is scope of the responsibility of the person in violate which causes of harm. [27]

Civil Liability Act 2003 – Section 12, onus of proof is one of the rules that related this case. The responsibility for breach of duty, it can consider that the plaintiff must show the obligation of verify with any reality of that causation. [28]

Refer to Civil Liability Act 2003 – Section 14, persons suffering harm presumed to be aware of obvious risks. [29] If the action is violating of duty of injury, the defendant try to protect that harm and it is the obvious risk. The plaintiff may or may not aware for that threat thus the plaintiff need to prove it. [30]

No proactive duty to warn of obvious risk is in Civil Liability Act 2003 – Section 15, it means someone does not warn another person about the obvious risk that can lead the victim of injuring. [31] However, it cannot relate if the victim ask for detail about risk from respondent and the plaintiff claim for the written law from defendant as well as the risk of death and personal injury come from the condition of a professional service that the appellant is an expert. [32]

What is more, it is also relate with Civil Liability Act 2003 – Section 17 in using merely liability in negligence for injury to someone who danger from recreational activity. [33]

Civil Liability Act 2003 – Section 18 stated that “the dangerous recreational activity means an activity engaged in for enjoyment, relaxation or leisure that involves a significant degree of risk of physical harm to a person.” [34]


Refer to John’s case can apply with Civil Liability Act 2003 – Section 18 which is the dangerous recreational activity John was playing golf with his friends in golf competition. His purpose may enjoy, relax, and leisure. This activities can cause of injure to him. [35] According to the breach of duty also can use with this case as well. John suffered injuries to his eye due to Peter’s golf ball hit on John’s head that his precision was not good, refer to Civil Liability Act 2003 – Section 9, the risk of was foreseeable, important, and prudence. The consideration might require the relevant which includes lack of care that causes to damage, the probably grave of injury, there are some burden of protection to evade risk of damage, and the social activity that make risk of harm. [36]

Refer to John stayed in the tree line when Peter hit golf ball. Peter calls John instead of telling him to avoid the ball so John suffered injuries to his eye. This situation can apply with Civil Liability Act 2003 – Section 13 and 15 that are the meaning of obvious risk and no proactive duty to warn of obvious risk. [37] “A person does not owe a duty another person to warn of an obvious risk to the plaintiff” [38] Peter has hinted just “watch out” instead of “fore”. It can cause John‘s harm. John has not asked for detail for risk and any written law as well.

In addition, According to Civil Liability Act 2003 – Section 19 relate with the Club point out as they are not responsible for any harm or death that happened in the competition. However, it is unclear for the warning; it was posting at the back of the scorecard with small writing and handed in to his friend. This circumstance can refer to Civil Liability Act 2003 – Section 17 which mentioned that “this division applies only in relation to liability in negligence for harm to a person resulting from a dangerous recreational activity engaged in by the plaintiff.” [39]


John can succeed to sue Peter due to he said just “watch out” instead of “fore” to warn John. It is not obvious word which may breach of duty of risk of injure. The Club, John also can sue because they neglect of duty of care by posting the warning at the back of scorecard with small font as well as gave the card to John’s friend in place of him.

However, John needs to prove himself that he is not aware for the obvious risk that injures to him. [40]

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