Definition

The fact that a promise has been made does not mean the promise can or will be enforced. Under
Roman law, a promise was not enforceable without some sort of causa that is, a reason for making
the promise that was also deemed to be a sufficient reason for enforcing it. Under the common law, a
primary basis for the enforcement of promises is consideration. Consideration usually is defined as
the value such as cash given in return for a promise in a bilateral contract or in return for a
performance in a unilateral contract.
Broadly stated that consideration is the price of a promise or an exchange of promises. In traditional
definition which is slightly confined to benefits and detriment. For example, Curie & Ors v Misa
(1875) case. A valuable consideration in the sense of the law, may consist either in some right,
interest, profit or benefit accruing to the one party, or some forbearance, detriment, loss or
responsibility, given, suffered or undertaken by the other.
An agreement is formed when one party accepts the offer of another. Nevertheless, not all
agreements can be enforced by the courts. The presence of offer and acceptance alone does not make
a contract. A transaction must be supported by consideration in order for it to be a contract. The
common law does not recognize bare promises. It emphasizes the element of bargain in commercial
transactions and hence the need for something in exchange for something. The element of exchange
is known as consideration.
Without a valid consideration, an agreement is void, unless they are same as one of the categories of
agreement list in the same section and being exempted from the rule.
According to Section 2(d) Contact Act 1950, when, at the desire of the promisor, the promisee or
any other person has done or abstained from doing, or does or abstains from doing, or promises to do
so or to abstain from doing something, such act or abstinence or promise is called consideration of
the promise.
Consideration may be viewed as a sort of bargain, or price which one party pays to buy the promise
or act of the other. When the promisor promises to do or to abstain from doing something, the
promisee must pay a price for it. This price to be paid may be an act or abstinence or a price to
perform a future act or abstinence.
Consideration can involve an exchange of benefits between two parties. For example, Ali promises
Hamed Rm50 if he cuts the grass in Alis garden. If Hamed agrees and cuts the grass in the garden,
Ali is contractually bound to pay Hamed RM50. The cutting of the grass in the garden is the

consideration for Alis promise and it is also the price that Hamed pays for Alis promise. Therefore,
a promises in return of an act between Ali and Hamed. Ali promises to pay RM50 and Hamed
perform the act requested by Ali. Besides, a promise also can be in return of a promise. For example,
Rena agrees to buy a car for RM1 millions from a distributor. Renas consideration is the promise to
pay RM1 millions and the distributors consideration is to pass ownership to Rena.
As a general rule, an agreement without consideration is void and it is clearly stated in Section 26,
Contracts Act 1950. For example, James promises without consideration to give Alvin RM1,000.
Then it is a void agreement because James doe not give anything in return od Jamess promises. Only
one party gives benefit.
For a valid consideration, we have to follow some basic rules; firstly, consideration must be
sufficient which means the consideration must be of some economic value of the other person and
must be legal. Secondly, consideration must be efficient and need to be adequate that means
something which is equal in value to what is being given by the other party (e.g.: money, effort and
act of forbearance). Lastly, consideration must move from the promise.

Types of considerations
Consideration can be classified as:

Past Consideration
Executory Consideration
Executed Consideration

1. Past consideration
Problems of past consideration often arise when a party promises to pay someone some money or
other compensation for work done in the past. Past consideration is not consideration for a new
promise. Therefore, a promise based on past consideration is not enforceable.
It can be describe as a prior act or performance. Past consideration will not support a new contract.
New consideration must be given. Where a promise is made subsequent to and in return for an act
that has already been performed, the promise is made on account of a past consideration.
According to Re McArdle (1951) case, a house was left by Mr McArdle to his wife for life. On her
death it was to be sold and the proceeds divided equally between the children of marriage. One of the
children paid for home improvements at a cost of 488. When the work had been done all the
children agreed that she should recover this sum from the proceeds of the eventual sale. After Mrs

McArdle died the validity of this agreement was disputed. The court held that no valid contract
existed since the home improvements were past consideration: they had been carried out before any
promise to pay had been made.
For example, Felipe, who has worked in management for the Acme Corporation for 30 years, is
retiring. The president of Acme says, Because you were such a loyal employee, Acme will pay you a
bonus of $100,000. Subsequently, the corporation refuses to pay the $100,000. Unfortunately for
Felipe, he has already done the work for which he has been promised to be paid. The contract is
unenforceable against Acme because it is based on past consideration. In the following case, the
court held that was lack of consideration and there was fraud, and it refused to enforce the contract.
The exception to this rule is an act originally done at the request of the promisor, a promise made
subsequent to the doing of that act, was deemed binding since the act constituted consideration. It is
clearly decided in Lampleigh v Brathwait. The court held that the defendant had to pay the money as
the both of the consideration were satisfied. First, the defendant asked the claimant to get the pardon.
Second, both parties had contemplated that the claimant would be paid for his services.

2. Executory Consideration
It is when one promise is made in return for another or a promise in return of promise. It consist of a
promise to do somethings in the future. The consideration is called executory because when the
contract is made the promisor has not yet performed his condition.
According to Wong Hon Leong David v Noorazman Bin Adnan (1995), where in return for the
respondents promise that he would assist in obtaining the approval for the application to covert and
subdivide certain lane to be developed into a housing estate, the appellant promised to pay RM268
888 for that service, the Court of Appeal held that exchange of mutual promises, though it is
executory consideration, was good consideration. Therefore, there was a binding agreement between
them and the respondents claim for the fee succeeded.
Besides, it also clearly decide in K Murugesu v Nadarajah. The respondent was the tenant of the
appellant. The respondent had asked the appellant to sell him the house he was living in. The
appellant finally wrote on a piece of paper an agreement to sell to the respondent the said house for
$26K within 3 months from the date of agreement. Later, the appellant refused to sell and the
respondent sued for specific performance. The appellant contended that there was no consideration
for the offer to sell and the agreement was void foe being without consideration. In this case, the
Federal Court held that the agreement must be seen to be case of executory consideration. A promise

is made by one party in return for promise made by other. The court further stated that where there
was a promise against a promise, one promise was consideration for the other because each may
have his action against the other for non-performance.
Example, Sami offers to sell Bobo his car for RM50, 000 and Bobo accepts. Sami is yet to deliver
the car to Bobo and Bobo is yet to pay the price. Hence, the consideration on both sides is said to be
executory, still outstanding and to be performed in the future.

3. Executed Consideration
It is when a promise is made in return for the performance of an act. It occurs when one of the parties
makes the offer or the acceptance in such a way that he has completely fulfilled his liability under the
contract. The only contractual liability remaining is that of the other party. It is clearly decide in
Carlill v. Carbolic Smoke Ball Co. [1893] Q.B. 256 (C.A.). In this case, Mrs Carlills consideration
was executed because she did not promise to use a smoke ball and catch flu and she just did it but for
Smoke Balls consideration was executory being a promise to give the reward.
For instance, Sami offers to sell Bobo his car for RM50, 000 and Bobo accepts. Sami delivers the car
to Bobo and Bobo is to pay the purchase price a week later. Under this arrangement, Sami has
nothing more to do, the consideration on his part, the car, has already been delivered. His
consideration is executed. An offers RM200 to anyone who finds and returns his digital camera
which he has earlier lost. Bobo finds and returns his digital camera in response to the offer. Bobos
consideration for Samis promise is executed, and only Samis liability remains outstanding.

Summary of Case
In this case, it is a past consideration. Past consideration is no consideration because to promise to do
something which has already been done is to promise nothing at all. Under English law past
consideration is insufficient to support a contract. This is clearly decide in Re McArdle and Roscorla
v Thomas. In Re McArdle, a son and his wife lived in his mothers house which, on her death, woulb
be inherited by her son and her three other children. The sons wife paid for substantial repairs and
improvements to the property. The mother then made her four children sign and agreement to
reimburse the daughter-in-law out of her estate. When the mother died and the children refused to
keep this promise, the daughter-in-law sued unsuccessfully. Her consideration for their promise was
past. It came before they signed the agreement to repay her. For Roscorla v Thomas, it was no
consideration for the promise.

Question: Barbara is on holiday in Langkawi. She telephones her friend Janice and asks her
if she will visit Barbaras house each day to make sure that it is still secure and feed her dog
whist she is away; Janice agrees. Barbara is away for 3 weeks and, in addition to keeping an
eye on the house and feeding the dog, Janice spends time mowing Barbaras lawn, weeding her
garden and cleaning the windows of the house. Barbara returns from holiday and is so grateful
that she promises to pay Janice Rm200 for all the work she has done.

Therefore, in Barbara v Janice, the consideration is not valid because an act done before promise is
made. Janice promises Barbara to help her secure and feed her dog while she is away about 3 weeks,
but Janice also helped to mow the lawn, weed the garden and clean the window of the house, then
when Janice came back she gave Janice RM200 for all the work she has done.

Besides, it is not a valid consideration as the promises is made out of natural love and affection. In
English law, it does not recognise natural love and affection is a valid consideration and was decide
in Brett v ZS & Wife. Accoring to Contract Act 1950, in order an agreement to be legally binding, it
must be an intention to create legal relation. The law has divided agreements into two groups which
are social and domestic agreements, and business agreements. In social and domestic agreement, the
general rule presumed that there is no intention to create legal relations. This group consist
agreement between family members, friends and colleagues. For example, Balfour v Balfour, the
defendant who worked in Ceylon promised to pay 30 monthly as maintenance fees, but he failed to
keep up the payments when the marriage ended. The Court held that the agreement was not legally
enforceable because the plaintiff did not provide consideration and there was no intention to create
legal relation. However, the presumption against the contractual intention will not apply where the

spouses are separating or divorcing. In Merritt v Merritt, the husband left his wife and signed an
agreement to pay 40 monthly for mortgage payments. When the mortgage was paid off, he would
transfer the house from joints name to the wife's name but he refused to transfer. The Court held that
there was an intention to be binding as they made the agreement when they were no longer living
together and it was evidenced by writing; therefore, the husband has to transfer the house to the
wife's name.
On the other hand, in Malaysia law, it can be a valid consideration if certain prerequisites are
complied with Contracts Act 1950 in Malaysia. According to section 26 (a) of Contract Act 1950, the
validity of an agreement is dependent upon it is expressed in writing, it is registered (if applicable)
and it is made on account of natural love and affection between parties standing in near relation to
each other. This is clearly decide in Re Tan Soh Sim. It is a Malaysian case which judicailly
construed the meaning of natural love and affection. In this case, a woman on her deathbed expressed
her intention to leave all her properties to her four adopted children. The court held that the validity
of consideration depended on natural love and affection between near relations, relationship and
nearness depended on the mores of the group to which the parties belong and the circumstances of
the particular family.
Therefore, in Barbara v Janice, it is no intention to create illegal relation as there are friend hence,
the consideration is not a valid consideration