Consideration

Consideration needs to be sufficient and not adequate. Consideration is exchanged in contract as practical benefits, it is an exchange of promise for some action.

Types of consideration

Executed – An act wholly performed as part of contract .

One party has done all that they are required to do under the contract. In other words they have executed their contract or meaning the other party has completed their side of the bargain.

Executory – promise to do something in future e.g. Stilk V. Myrick (1809)

Past consideration – Generally doesn’t amount to consideration because the action was done before the promise e.g. Roscola V. Thomas (1832), Re McArdle (1957).

Exceptions to past consideration – e.g. Lampleigh V. Braithwait (1615) and Pao On V. Lau Yin Long (1980).

In the case of Lampleigh there was a promise for a action. There has to be a promise before action for there to be an exception to past consideration. When Lampleigh was asked to kill and then ask for a pardon from the King there was a promise for a act but the promise was before the action.

There are 3 conditions where a contract can be valid after past consideration

• The act must be done at the promisours request
• The parties must have understood that the act was to be remunerated futher by a payment.
• …or conferment of a benefit must have been legally enforceable had it been promised in advance.