Introduction
In the law of England and Wales, the doctrine of consideration is a fundamental component for the formation of a legally enforceable contract. In simple terms, consideration can be understood as the value exchanged between the parties to an agreement; it is the "price" for which the promise of one party is bought (McKendrick, 2021). For a promise to be binding, the person to whom it is made must have provided some form of consideration. Over centuries, the courts have developed a set of rules to determine what constitutes valid consideration. These rules address issues such as the timing of the consideration, its sufficiency, and whether the performance of an existing duty can count as valid consideration. Alongside this, the doctrine of privity of contract dictates who is entitled to enforce the rights and obligations under a contract. This assignment will examine six foundational cases that have been instrumental in shaping these crucial areas of contract law. For each case, it will state the legal issue, the basic facts, and the judgment of the court.
Roscorla v Thomas (1842) 3 QB 234
The Issue
The central legal issue in Roscorla v Thomas was whether a promise made after a sale had been concluded could be enforced, or whether it failed for being based on 'past consideration'.
Basic Facts
The claimant, Roscorla, purchased a horse from the defendant, Thomas, for a price of £30. After the contract of sale was completed and the horse had been delivered, the defendant gave a subsequent verbal promise, or warranty, to the claimant that the horse was "sound and free from vice". Later, the claimant discovered that the horse was, in fact, vicious and unruly. The claimant brought an action against the defendant for breach of this warranty.
The Judgement
The court found in favour of the defendant, Thomas. It was held that the defendant's promise regarding the horse's condition was not supported by any new consideration from the claimant. The payment of the £30 purchase price was a 'past' consideration, as it had been given for the original promise to deliver the horse, not for the later promise about its soundness. The sale was already a completed transaction at the time the warranty was given. Therefore, the defendant's warranty was a gratuitous promise (a bare promise) and was legally unenforceable. The case established the important principle that past consideration is not good consideration.
Price v Easton (1833) 4 B & Ad 433
The Issue
The issue in Price v Easton concerned the doctrine of privity of contract. The question for the court was whether a third party, who was intended to benefit from a contract but was not a party to it, could sue to enforce the agreement.
Basic Facts
A man named William Price was indebted to the claimant, John Price. A third party, Easton (the defendant), made a contract with William Price. In this contract, Easton agreed that if William Price would perform a specific piece of work for him, Easton would pay a sum of £19 directly to the claimant, John Price, to settle William's debt. William Price duly completed the work as agreed. However, Easton failed to make the promised payment to John Price. Consequently, John Price brought an action against Easton to recover the money.
The Judgement
The court held that John Price’s claim must fail. The judges reasoned that John Price was not a party to the contract between Easton and William Price. He was a 'stranger to the consideration', meaning he had not personally provided any consideration to support Easton’s promise to pay. Lord Denman CJ stated that the claimant did not "shew any consideration for the promise moving from him to the defendant". This case is a clear illustration of the traditional doctrine of privity of contract, which states that only a party who has provided consideration and is a party to the contract can sue upon it.
White v Bluett (1853) 23 LJ Ex 36
The Issue
The legal issue in White v Bluett was whether a promise to stop complaining could constitute sufficient consideration in the eyes of the law to make a counter-promise legally binding.
Basic Facts
A son had borrowed money from his father and had given his father a promissory note as security for the debt. The son frequently complained to his father that he had been treated less favourably than his siblings and had not received as much money. The father, seemingly to secure "peace and quiet", promised that if the son would cease his complaints, he would be released from his obligation to repay the debt on the promissory note. After the father’s death, the executor of his estate, White, sued the son, Bluett, to enforce the promissory note and recover the outstanding debt.
The Judgement
The court held that the son's promise to stop complaining was not sufficient consideration to support the father's promise to forgive the debt. Pollock CB reasoned that the son had no legal right to complain, as the father was free to distribute his property as he saw fit. Therefore, in ceasing to do something he had no right to do, the son had not provided anything of value. The promise was too intangible and vague to be recognised as consideration by the courts. As such, the father's promise was not legally binding, and the executor was entitled to enforce the debt.
Collins v Godefroy (1831) 1 B & Ad 950
The Issue
This case considered whether the performance of an existing public duty, which is already required by law, can amount to valid consideration for a promise of payment.
Basic Facts
The defendant, Godefroy, was a litigant in a court case and required the claimant, Collins, to attend the trial and give evidence on his behalf. Godefroy promised to pay Collins for his time and any loss of earnings incurred by attending court. Collins had received a subpoena, a court order which legally obliged him to attend the trial as a witness. Collins attended the court for six days as required, but was ultimately not called to give evidence. He then sued Godefroy to recover the payment that had been promised.
The Judgement
The court ruled in favour of the defendant, Godefroy. It was held that Collins had not provided good consideration for the promise of payment. He was already under a pre-existing public duty, compelled by the subpoena, to attend court. As he was simply doing what he was legally required to do, he had not suffered any additional detriment or conferred any extra benefit on Godefroy beyond what the law demanded. Lord Tenterden CJ stated that "if it be a duty imposed by law upon a party regularly subpoenaed, to attend from time to time to give his evidence, then a promise to give him any remuneration for loss of time incurred in such attendance is a promise without consideration."
Stilk v Myrick (1809) 2 Camp 317
The Issue
The key legal issue in Stilk v Myrick was whether performing an existing contractual duty could be valid consideration for a promise of additional payment from the other contracting party.
Basic Facts
The claimant, Stilk, was a seaman who had agreed to work on a ship owned by the defendant, Myrick, for a voyage from London to the Baltic and back. The terms of his contract stated he would be paid £5 per month. During the voyage, two of the twelve crew members deserted the ship. The captain, being unable to find replacements, promised the remaining nine crew members that he would divide the wages of the two deserters between them if they would work the ship back to London. The crew agreed and successfully brought the ship home. Upon their return, the captain refused to honour his promise of extra payment.
The Judgement
The court, as reported by Campbell, held that the captain's promise was unenforceable due to a lack of consideration. The remaining crew members had not provided anything new in return for the promise of extra pay. They were already bound by the terms of their original contract to work the ship home and to deal with the normal emergencies of the voyage, which included the desertion of some crew members. In fulfilling their duty to get the ship back to London, they were simply doing what they were already contractually obliged to do. This case established the principle that promising to perform an existing contractual duty is not good consideration for a new promise.
Pinnel's Case (1602) 5 Co Rep 117a
The Issue
The issue in Pinnel's Case was fundamental to the law of debt: can the payment of a smaller sum of money be legally accepted as satisfaction for a larger, existing debt?
Basic Facts
Pinnel brought an action against Cole for the repayment of a debt of £8 10s, which was due to be paid on 11 November. Cole’s defence was that, on 1 October, before the debt was formally due, he had paid Pinnel £5 2s 2d at Pinnel’s request. Cole argued that Pinnel had accepted this smaller, earlier payment in full satisfaction of the entire £8 10s debt.
The Judgement
The court, led by Sir Edward Coke, established the general rule that "payment of a lesser sum on the day in satisfaction of a greater, cannot be any satisfaction for the whole". This means that part payment of a debt on or after the due date is not good consideration for a creditor’s promise to forgive the balance. However, the court also established an important exception. A new element introduced by the debtor, at the creditor’s request, can constitute fresh consideration. Lord Coke gave the examples of a "horse, hawk or robe" being given instead of money, as this is a different thing to what was owed. In this specific case, the court found for Cole because the payment was made on an earlier date than was required. The early payment was a new element that provided a sufficient benefit to the creditor to be considered valid consideration for the promise to discharge the entire debt.
Conclusion
The cases examined above represent key pillars in the English law of contract. Together, they illustrate several strict but important rules governing the doctrines of consideration and privity. Roscorla v Thomas confirms that consideration cannot be past, while Price v Easton demonstrates the traditional barrier that privity of contract creates for third parties. The decisions in White v Bluett, Collins v Godefroy, and Stilk v Myrick clarify that for consideration to be valid, it must be sufficient, meaning it must have some value in the eyes of the law, and that merely performing a pre-existing public or contractual duty does not qualify. Finally, Pinnel’s Case establishes the enduring, if sometimes criticised, rule that part payment of a debt is not, by itself, good consideration to discharge the whole sum. These principles, while developed centuries ago, continue to form the essential groundwork for understanding contractual obligations today.
References
McKendrick, E. (2021) Contract Law: Text, Cases, and Materials. 10th edn. Oxford: Oxford University Press.
Poole, J. (2021) Textbook on Contract Law. 15th edn. Oxford: Oxford University Press.
Collins v Godefroy (1831) 1 B & Ad 950
Pinnel's Case (1602) 5 Co Rep 117a
Price v Easton (1833) 4 B & Ad 433
Roscorla v Thomas (1842) 3 QB 234
Stilk v Myrick (1809) 2 Camp 317
White v Bluett (1853) 23 LJ Ex 36
