Friday, May 14, 2021

Law of consideration

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It will be necessary to give special reference to the law of consideration in dealing with both cases so as to give a careful determination on whether Paul should pay the extra money to the contractors or the bonus to his staff.When identifying what consideration is, it will also be right to consider if the rules of consideration were met in this case so as to help in deciding whether Bookworm Ltd. should pay both parties the agreed extra amounts or bonuses. In consideration, a promise made by deed is binding, and a promise in a 'simple' contract, that is; not by deed, is binding if it is supported by consideration. It is however important to note that a promise not supported by consideration, is not binding. It is also important to note that consideration must be something of value in the eyes of the law, though it does not need to be adequate. Value is interpreted as economic value and not moral obligation, as can be referred to the case of Thomas V Thomas, whereby Mrs. Thomas' payment of £1 per year to her late husband's executors to live in the house for the rest of her life, was held by the court as sufficient consideration.We could apply to this case some of the rules of consideration that state that consideration must move from the promisee and that it must not be past. As promises to perform existing duties are considered insufficient consideration, that is, not consideration, it can be argued that Paul was not bound to pay his employees the bonus he had promised them as first of all, his employees had not been promised by him before they had transferred the books into the new warehouse that he will pay them a bonus. The promise to pay his staff the £50 bonus was made later on that night after he was so pleased at the speed at which they had shifted the books into the new warehouse. This can be considered as a 'gratuitous' act and not valid consideration as the promise was not made to the employees before they had commenced the work. This situation can be likened to the case of Re McArdle (151), whereby a certain woman had sued a family that had promised to reimburse her for the work that she had done on their house, but the family had failed to keep their promise and not paid her. The woman lost the case as she had not provided no consideration on the promise to pay since she had carried out the work before the promise was made and therefore was considered by the courts as past consideration. Furthermore, it can further be argued that these employees were already in the employ of Bookworm Ltd., and were therefore simply performing their 'legal' duty. The case of Stilk v Myrick (180) also comes into play as the workers had not done anymore than they were obliged to do by their contracts. There was no consideration for the additional wages (bonuses). In the situation of the Bookworm Ltd workers, there was no prior request or expectation of a bonus payment.To consider if Paul is supposed to pay Bricks & Mortar or not, we can reflect on the cases of Stilk V Myrick (180) and the Williams v Roffey Bros & Nicholls Ltd. In the former case, that is, Stilk v Myrick, the remaining crew members of a ship were not paid the additional wages promised to them as their case was not regarded as good consideration. In that particular scenario, two of the ship's crew that had been contracted for a voyage from London to the Baltic, deserted in Cronstad. The captain promised to divide up the deserters' wages if the remaining crew took the ship back to London shorthanded. On arrival the owners refused to pay and the case was held by the courts whereby it was considered that the remaining crew had not done any more than they were already obliged to do by their contracts. There was no consideration for the additional wages.However, in a controversial Court of Appeal decision of 10 in the case of Williams v Roffey Bros & Nicholls Ltd, it seemed to abolish the requirement that any variation to an existing contract needs to be supported by fresh consideration. The contractors were able to enforce a promise to pay extra if work was completed on time under an existing contract. They were said to have provided practical benefit to the defendants. In the case of Bookworm Ltd against Bricks & Mortar we could apply the same principle and mention that Bricks & Mortars' fresh promise to finish the work that they were contracted to do on time, conferred a 'practical benefit' on Bookworm Ltd which was consideration for Paul's promise to pay the extra money to have the job completed on time. Furthermore, Bricks & Mortar had not acted unconscionably, for example, by exercising fraud or duress upon Paul. This can further be supported in the case Currie v Misa (1875) which supports the fact that a valuable consideration, may consist either in some right, interest, profit or benefit accruing to one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other.We could also consider the case of Glasbrook Brothers Ltd v Glamorgan County council [15], whereby the courts held that the police were simply performing their legal duty, and therefore the public, who pay for the protection provided for by the police through rates and taxes, could not be called upon to make further payments for what was considered their right. However if a member of the public desires services of a special kind from the police, they (the police) may provide the necessary constables for that purpose in consideration of payment. The House of Lords ruled that Glasbrook was obliged to pay the Police because it had provided more protection than they reasonably thought necessary. Going back to our reference on the Williams v Roffey Bros case, it could be stated that the same situation applied to the Bookworm and Bricks & mortar scenario as according to the judgement formerly made by the Court of Appeal, it held that, where X makes a further promise to Y in return for Y's promise to perform his contractual obligations already owed to X, and as a result of Y's promise or performance, X obtains a practical benefit, Y provides good consideration for X's further promise.The facts, arguments and cases presented above, could therefore lead one to come up with the conclusion that in the case of Bricks & Mortar, Paul had an obligation to fulfil the payment by due reason of the fact that the fresh agreement superceded the original contract. In the case of his workers, the case could be ruled in his favour on the grounds that he made the promise to them regarding payment of the bonuses later on after they had done the work. It could however be argued that the workers exceeded the expected time to transfer the books into the new warehouse and therefore they did something extra than what was required of them, but the fact remains that they were under no pressure from Paul and neither had they previously been promised any bonuses then. Bibliography1. R Card and J James 00. Law for Accountancy Students, seventh edition, The Bath Press.. D. Keenan 000. Advanced Business Law, Eleventh Edition, Longman Pearson Education Ltd.. T Weir 000. A case book on Tort, Ninth Edition, Sweet and Marxwell London. Please note that this sample paper on law of consideration is for your review only. In order to eliminate any of the plagiarism issues, it is highly recommended that you do not use it for you own writing purposes. 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