This assignment will advise Emma on two separate legal issues arising from events over a weekend, applying the principles of English contract law. The first issue concerns whether Emma is legally bound to pay an additional £30 to her hairdresser, Sarah, for a service already completed. This requires an analysis of the doctrine of consideration, specifically the rule relating to past consideration. The second issue is whether the agreement between Emma, Ted, and Daniel to share any potential winnings from greyhound racing is an enforceable contract. This will involve an examination of the doctrine of intention to create legal relations.
Emma’s Obligation to Pay Sarah an Extra £30
The first issue to be resolved is whether Sarah can enforce Emma’s promise to pay an extra £30. For a promise to be legally binding as a contract, it must be supported by consideration. Consideration is often described as ‘the price for which the promise of the other is bought’ (Pollock, 1950). Each party must provide something of value in the eyes of the law. The central problem here is whether Sarah has provided valid consideration for Emma’s promise of the extra £30.
The relevant legal principle is that consideration must not be past. This means that any act or service which has already been performed before a promise is made cannot be considered good consideration for that later promise. The case of *Roscorla v Thomas* (1842) 3 QB 234 provides a clear illustration. After a horse had been sold, the seller promised the buyer that the horse was ‘sound and free from vice’. The court held that this promise was unenforceable because the sale was already complete, and the buyer had given no new consideration for the seller’s subsequent promise. Similarly, in *Re McArdle* [1951] Ch 669, a woman carried out improvements to a house she lived in, which was part of her husband’s family estate. After the work was completed, the beneficiaries of the estate signed a document promising to pay her £488 for the work. The Court of Appeal held that this promise was unenforceable because the work had been done before the promise to pay was made, and was therefore past consideration.
Applying this rule to Emma’s situation, Sarah’s service of hairdressing was completed before Emma made the promise of an extra £30. Emma was ‘so pleased with what she had done’ *after* the service was finished that she then made the promise. The act of hairdressing was the consideration for the original, unspoken contract to pay the standard price for the service. The new promise to pay an additional £30 was made after this contract was performed by Sarah. Sarah did not provide anything new in return for the extra £30; she did not style Emma’s hair again or offer any additional service. The hairdressing service is therefore past consideration in relation to Emma’s new promise.
An exception to the past consideration rule exists, as established in *Pao On v Lau Yiu Long* [1980] AC 614. This exception allows past consideration to be valid if three conditions are met: the act was done at the promisor’s request; the parties understood that the act was to be remunerated either by a payment or the conferment of some other benefit; and the payment or benefit would have been legally enforceable had it been promised in advance. In this scenario, while Sarah’s hairdressing was done at Emma’s request, the second condition is not met in relation to the extra £30. The parties would have understood that the hairdressing was to be remunerated at the salon’s standard price. There was no understanding at the time of the service that an extra payment might be made if Emma was particularly pleased. The promise of £30 was a spontaneous bonus, not a payment that was implicitly expected.
Therefore, because Sarah’s hairdressing service is past consideration for Emma’s promise to pay an extra £30, the promise is not supported by valid consideration. It is a gratuitous promise, which is generally not enforceable in contract law.
In conclusion, Emma is not legally obliged to pay the additional £30 to Sarah. While she may feel a moral obligation to do so, there is no contractual basis upon which Sarah could sue her for the money.
Enforceability of the Agreement to Share Winnings
The second issue is whether Emma can compel Daniel to share his £600 winnings. For a valid contract to exist, in addition to offer, acceptance, and consideration, the parties must have an intention to create legal relations. The law uses rebuttable presumptions to determine whether this intention exists, which depend on the context of the agreement.
In social and domestic agreements, there is a presumption that the parties do not intend to create a legally binding contract. The leading case is *Balfour v Balfour* [1919] 2 KB 571, where a husband who worked abroad promised to pay his wife a monthly allowance. When they separated, the wife’s claim for the allowance failed. The court held that agreements between spouses are often not intended to have legal consequences. Lord Justice Atkin stated that such agreements are made in a domestic context where the parties do not intend for them to be sued upon. This principle has been extended to agreements between other family members, as in *Jones v Padavatton* [1969] 1 WLR 328, and also to agreements between friends.
The agreement between Emma, Ted, and Daniel was made in a purely social context. They are described as friends on their way to a social outing at a greyhound racing track. Ted’s proposal, “If any of us makes a killing… how about we share the winnings?”, is phrased as a casual suggestion rather than a formal business-like proposition. The agreement was verbal and seemingly made without any serious consideration of legal consequences. Therefore, the presumption against the intention to create legal relations clearly applies to this situation.
However, this presumption can be rebutted if the evidence shows that the parties did, in fact, intend their agreement to be legally binding. The court will look at the words used, the context of the agreement, and the conduct of the parties. In *Merritt v Merritt* [1970] 1 WLR 1211, an agreement between a separated husband and wife was held to be binding because they were no longer living in amity and had recorded their agreement in writing, showing a clear intention to be bound.
A case more relevant to the facts is *Simpkins v Pays* [1955] 1 WLR 975. In this case, a grandmother, her granddaughter, and a paying lodger regularly entered a newspaper competition together. They shared the cost of entry and agreed that any winnings would be shared. When the grandmother’s entry won, she refused to share the prize money. The court held that there was a binding contract. The presence of the lodger, who was not a family member, and the regularity of the arrangement were factors that helped rebut the presumption of a purely social agreement. It was considered a ‘joint enterprise’ to which all contributed in the expectation of sharing any prize.
Emma’s situation can be distinguished from *Simpkins*. The agreement between Emma, Ted, and Daniel appears to be a one-off, spontaneous arrangement, unlike the regular, organised entry into the competition in *Simpkins*. There is no evidence of pooling money for bets or any other formal step that would suggest it was a ‘joint enterprise’. The language used is informal, and there is no written evidence of the agreement. The facts are more aligned with a casual understanding between friends than a serious, binding arrangement. It is arguable that reasonable people in the position of Emma, Ted, and Daniel would not have expected to be able to sue one another over such a casual remark. The lack of certainty (e.g., what constitutes a ‘killing’ beyond ‘more than £100’) also points away from an intention to be legally bound.
Given the social context, the informal language, and the spontaneous nature of the agreement, it is unlikely that a court would find sufficient evidence to rebut the presumption that there was no intention to create legal relations.
In conclusion, the agreement to share the winnings is likely to be unenforceable for lacking the requisite intention to create legal relations. Therefore, Emma cannot compel Daniel to pay her a share of his £600 winnings.
References
- Balfour v Balfour [1919] 2 KB 571
- Jones v Padavatton [1969] 1 WLR 328
- Merritt v Merritt [1970] 1 WLR 1211
- Pao On v Lau Yiu Long [1980] AC 614
- Pollock, F. (1950) Principles of Contract. 13th edn. London: Stevens & Sons.
- Re McArdle [1951] Ch 669
- Roscorla v Thomas (1842) 3 QB 234
- Simpkins v Pays [1955] 1 WLR 975
