What is a contract?

In earlier times, a contract would have been defined as an ‘agreement of

wills by which one or several persons obligate themselves to one or several other persons to
perform a prestation’ 1as stated in the Civil Code of Quebec. In recent times however, the
definition of a contract is clearly implied as simply an expressed or written agreement between
two parties to dispense a service or product. A contract arises when the parties concur that
there is an agreement. The major difference in the older and newer definition is heavily
dependent on the word ‘expressed’. While previously two parties may enter into a legal
contract without the need of expressing agreement, nowadays it is fundamental for a contract
to compromise of the four major elements of a contract. In order for a contract to be
enforceable, the indispensable elements that must be established for the formation of a
contract are offer, acceptance, consideration and intention to create legal relations. Any false
statement, coercion, unconscionable or undue influence dealings could possibly make a
contract void and illegal. In modern times, the formation of a contract is vaguely and
ambiguously defined due to the inhibitions seen in pinpointing movement of consideration or
the intent to create legal relations. However the fundamental and indispensable foundation of
a contract still is the elements of offer and acceptance. As such, an offer is a declaration put
forth by one party informing his or her willingness to enter into a contract and to be bound by
the terms of it. For example, a contractor offers to build a building in exchange for a specified
sum of money. An offer may be made in writing or in person and it offer must be distinguished
from mere alacrity on whether to deal or negotiate. However the mere distinction between an
offer and an invitation to negotiation is seen to be a strenuous one to lay out in unequivocal
circumstances such as display of goods for sale, advertisements, auction sales and tenders. An
offer will not stand without just and unequivocal acceptance and this forms the crux of the
definition of acceptance. It amounts to the unqualified and unconditional assent,
communicated by the offeree to the offeror to all the terms of the offer made with the
intention of accepting. While the existence of offer and acceptance is pivotal in the formation

1
Contract Law: Cases and Materials, Geoffrey Samuel(Sweet and Maxwell,2007) 1
of a contract, consideration and intent still remains an important aspect that needs to be
fulfilled. The lack of such fulfillment essentially leads to problems in a contractual agreement as
seen in the case of Chuck and others. As it has been famously said, “it must be emphasized that
the phrase ‘offer and acceptance’ though hallowed by a century and a half of judicial usage, it is
not to be solely used as a talisman revealing and requires both intent and consideration to truly
satisfy the means of a contract’. In the earlier understanding of English law, the contrast
between enforceable and unenforceable concurrence is often one of the form of indication that
can be found in the survival of by-law that a promise by deed is legally binding.However, since
the sixteenth century the critical factor is the existence or the absence of consideration in
modern times. Now in simple terms, consideration can be defined as the price paid for the
promise of which another is bought as said by Sir Fredrick Pollock2. The last most arbitrary
element devoted to considering how contracts are formed is intention to create legal relations.
This element is the most difficult to be defined in court by a judge as it deals with matters of
the heart and it is fickle to pinpoint where and when an intention to enter into a contract may
take place. As such, this leads to vague and ambiguity in determining the potential offeree in a
contract such as in the case of Chuck and others. Intention to create legal relations can be
explained as a purpose to enter a legally binding contract or agreement. As it relies upon the
readiness of a party to receive the legal sequences of having entered into a contract, this leads
to uncertainty and issues as faced by Chuck and others.

Based on the question given, Chuck who is the client in need of legal advice is the owner of a
circus who decides to do some slight repair for his circus. He hires a local locksmith Robert, to
fit new locks on all the lion cages whom he then agrees with to enter into a contract. As defined
by Professor Treitel, an offer is an expression of willingness to be bound by certain terms of a
contract3. This was seen in the agreement of Chuck in enabling Robert to fit new locks on the
lion cages in his circus. While an offer was not distinctly communicated in the situation, it can
be clearly seen that there was some form of acceptance made by Robert as seen in his conduct.

2
Principles of Contract, Winfields (Stevens, 1950) 133
3
http://www.bitsoflaw.org/contract/formation/study-note/degree/offer-overview, accessed on 28 November
2017
His conduct of being on his way to start the new job can be classified as a method of
acceptance by conduct. This is exemplary in the case of Brodgen v Metropolitan Rail and Carlil v
Carbolic Smoke Ball Co4. In the former case, the act of coal being delivered on the terms
specified to the defendant was interpreted to be a form of acceptance by conduct even though
there was no communication of acceptance by the plantiffs. Similarly in the latter case, the
promise made to pay 100 pounds to any person who succumbed to influenza after using one of
their smokeballs in a said manner and for a specified period was legally enforceable as MrsCarlil
succeeded in catching influenza. As per these two cases, both offerees were held to have
accepted by conduct. It was held that it must be comprehensible that the offeree acted
objectively assessed, with purpose and to agree to the offer. In the case discussed, Robert
being the offeree must have objectively assessed the contract to have been on his way to
perform the act. While this can be construed as an acceptance, a unilateral contract is usually
accepted by conduct and there is no acceptance until the act is completely executed. It can be
seen that the act was completed by Robert and this concludes the agreement between Chuck
and Robert. However the question which emerges is if there was sufficient consideration
between the two contracting parties. It can be seen in the question that Chuck had not
intended or initiated any form of payment towards Robert for his services rendered and vice
versa. If so in the future Robert would want to sue Chuck for payment stating services provided
by him, Chuck could argue that past consideration is not good consideration. Much similar to
the case of Roscorla v Thomas5, it was held in this case that the promise made was
unenforceable as the defendant’s promise was made prior to the sale of the horse. This
avenues that no consideration was given by the plaintiff for the promise. Following the case of
Re McArdle (1951), 6the Court of Appeal held that the transaction made was incomplete and
thus it was considered only a promise to pay and not a gift. In this case, the act had already
been carried out by MrsMcArdle before she had asked for the payment therefore making it a
past consideration. Hence, the agreement made was unenforceable as past consideration

4
Contract Law, Meera Mahendranathan/MuraliKandasamy (Brickfields Asia College, 2011) 8
5
http://casebrief.me/casebriefs/roscorla-v-thomas/, accessed on 29 November 2017
6
Contract Law,Richard Taylor and Damian Taylor (OXFORD, 2015) 72
amounts as not good consideration.In a nutshell, Chuck will not be held liable if Robert were to
bring a case before court to sue him for the absence of payment for his services.

The next issue which arises is between Robert and Leonard. While Robert was on his way to fit
the new locks on all the lion cages, he bumps into Leonard, who is a lion tamer. Leonard then
tells Robert that he would pay him an extra 100 pounds if he completes his labor of fitting the
new locks for all the lion cages. The issue of offer and acceptance in this scenario would not be
a concern as Leonard clearly offers 100 pounds to Robert to complete fitting the new locks in
the lion cages which Robert went on to finish. Leonard’s offer of 100 pounds for Robert’s
contractually obliged act of fitting new locks may seem completely unjust and even redundant
to the reasonable man. However, by the general ideologies of consideration, performance or a
promise to perform an existing duty to a third party is commonly accepted as good
consideration. This is seen in the case of Shadwell v Shadwell (1860)7 where an uncle promised
his nephew, who was a Chancery barrister 150 pounds yearly until the nephew’s income
reached 600 guineas. The uncle’s promise was held to be enforceable as it was seen as
contractual intent as opposed to mere intangible sentiment or even a desirable family
arrangement. However in more recent times, it has become more pivotal that such
performance of existing duties owed to a third party was valid and sufficient consideration. In
the case of Scotson v Pegg8, Pegg’s promise for the deliverance of Scotson’s coal was held to be
enforceable although he was already contractually obliged to do so for a third party anyways.
This predicament clearly echoes the case of Leonard and Robert where Robert had already
been previously contracted by a third party, Chuck to fix the locks on the lion cages. As such,
Leonard, being very much aware of this existing duty of Robert’s further provides an additional
100 pounds for the services that would have been rendered by Robert anyway. This is far
beyond what is expected from the judgment held in the cases of Shadwell v Shadwell or even
Scotson v Pegg for the matter. This is due to the fact that in cases such as Pao On v Lau Yiu
Long9, the House of Lords affirmed that even the mere promise of performing the duty owed to

7
Contract Law Fifth Edition,Mindy Chen-Wishart (OXFORD, 2015) 127
8
Scotson v Pegg [1861] EWHC Exch J2
9
Pao on v Lau Yiu Long [1979] 3 All ER 65 Privy Council
a third party could be held as good consideration.Subsequently, these decisions are further
supported in the case of New Zealand Shipping Co Ltd v AM Satterthwaite& Co Ltd which is
infamously known as the Eurymedon case. In this case, Lord Wilberforce quoted ‘an agreement
to do an act which the promisor is under an existing obligation to a third party to do, may quite
well amount to valid consideration as the promise obtains the benefit of a direct obligation
which he can enforce’10, as supported in the case of Scotson v Pegg. From these cases above, it
is clearly seen that a promise to perform duty owed to a third party is considered good
consideration. Robert’s act has stupendously exceeded such dictations of good consideration
has he did not just merely promise to complete the act but actually successfully did fit new
locks in the lion cages. Consequently, Leonard has to fulfill his covenant towards Robert as
Robert has kept his promise by finishing his task of fitting new locks on all the lion cages which
makes Leonard to consummate his part of consideration by paying Robert the 100 pounds.

The next legal dispute is seen between Chuck and Paul. Chuck decides to get the Big Top
painted before the weekend and by doing so he hires Paul to undertake the task for 2500
pounds. The complication emerges when halfway through the job, Paul realizes that it is going
to take an extended duration of time to complete the painting and he demands an extra 800
pounds to cover the cost. Chuck agrees to pay an extra 800 pounds when he sees Paul deserting
the job midway. There was clearly offer and acceptance by Chuck and Paul respectively in this
scenario. . It is also speculated that both parties have the intention into entering this agreement
as it is of commercial nature and there is no indication otherwise. In order to decide if Chuck
has to pay the sum he agreed upon, it needs to be seen if Paul has given good and sufficient
consideration in return for the 800 pounds.The general rule for this is that performance of an
existing contractual duty to the same promisor is not considered as good consideration. This
rule was clearly initiated in Stilk v Myrick (1809) where although the captain promised that he
would give out the wages of the men who deserted the crew to the remaining members, the
court held that the promise of additional payment was not enforceable as the crew had
provided no consideration to support the promise, and had not done anything to exceed their

10
Contract Law Third Edition, Ryan Murray, (Sweet & Maxwell, 2014) 92
existing contractual duty.11 Despite the general rule, the case of Williams v Roffey Bros
12provided a new view in regards of the decision in Stilk. In this case, the plaintiffs were facing
financial difficulties, thus were not able to complete their contractual duties. Due to this, the
defendants promised to pay them an extra 575 pounds per flat to ensure completion of
refurbishment of the flats as non-completion of the work would cause defendants to face a
financial penalty. The defendants however did not pay the extra amount, claiming that plaintiffs
did not provide additional consideration as in the case of Stilk v Myrick. The Court of Appeal
however held that performance of an existing contractual duty can amount to consideration if
the performance confers a ‘practical benefit’ on the other party, in this case the defendants
avoiding the time and expense of finding alternative contractors for work completion, as well as
avoiding a heavy penalty for non-completion. In this situation, it can be seen that Chuck would
receive a practical benefit should the painting be completed in time as he would receive many
visitors during that weekend, thus it is beneficial for the painting to be completed before then.
However, it can be argued that Chuck was forced to agree to the 800 pounds extra charges
under duress when Paul started packing up and getting into his van. Duress occurs when an act
of threat or intimidation occurred in order to gain consent of the other party. It can also be
easily said that any practical benefit obtained in consideration that was subjected to duress will
be considered as invalid or not good consideration. As such, Chuck would be under no legal
liability to pay Paul an additional sum of money as Paul is directly subjecting Chuck to
commercial duress. This is because he is completely aware of the fact that higher visitors to the
circus on a bank holiday would consequently result in a higher income for Chuck. With his
livelihood at stake, Paul’s request for additional sum is absurd and purposive. While it may be
argued that Chuck receives the practical benefit of Paul’s continued performance of painting
the Big Top before the weekend and also saving time and money in not having to find a
substitute, the fundamental theory in the case of Williams v Roffey Bros Ltd takes precedence
here. In light of the case mentioned, the plaintiffs were facing financial turmoil and as such
were not able to complete their contractual duties. Due to this, the defendants promised to pay

11
(1809) 2 Camp 37; 170 ER 1168 ; 6 Esp 129;170 ER 851
12
(1857) 7 E & B 872
them additional 575 pounds per flat to ensure completion of refurbishment of the flats as non-
completion of the work would cause defendants to face a financial penalty. The defendants
however failed in making payment for the extra amount, claiming that plaintiffs did not provide
additional consideration as in the case of Stilk v Myrick. However in this case, it was ruled that
the practical benefits gained by the promisor would be seen to be good consideration similarly
to the case of Chuck. However, the courts also held that the additional payment that was
demanded was made under duress and such completely cancels out any consideration seen in
light of practical benefit. One view by Deputy Judge David Donaldson QC found that any
agreement that was supported by consideration can and will be voidable due to duress13.

The final issue is seen between Chuck and Mary. Chuck promises Mary an increase in her salary
for covering the fire eating act. Mary’s act of covering the act of the fire eaters is one of that is
not required and above and beyond her contractual obligations as a trapeze artist. Following
the rule laid by in the case of Roscorla v Thomas, past consideration is not good consideration14.
However as with any rule, there are crucial exceptions and one of which is significant in the
case of Chuck and Mary is if the act was asked to be performed by the promisor. Mary’s action
of the fire eating performance is merely an act or forbearance in time past by which Chuck has
benefitted without sustaining any legal liability. As so, Chuck is rightfully not obliged to pay
Mary for what she was not contracted to do.

As seen, it can be interpreted that how consideration applies form case to case varies
momentously. As such, the case of Chuck and associates is not exempted from the
quintessential loopholes implicitly seen in the doctrine of consideration. Regardless of the
intricacies consideration provides to mitigate the practical problems promissory estoppel is an
equitable waiver in the broader sense of the doctrine. Hence, accompanied by the principal of
promissory estoppel the doctrine of consideration remains one of the undisputable foundations
of the law of contract.

13
Contract Law 5th Edition, Richard Taylor, Damian Taylor (OXFORD, 2015) 83
14
Roscorla v Thomas, (1842) 3 QB 234
Bibliography

 Books
Chen-wishart M, Contract Law (5thedn Oxford University Press, 2015)
Elliot C, Contract Law (9thedn Pearson,2013)
Stone R, The Modern Law of Contract ( 3rd edition Routldege, 2011)
Poole J, Casebook on Contract Law(12thedn Oxford, 2014)
Mckendrick E, Contract Law ( 6thedn Oxford University Press, 2014)
Taylor R, Contract Law Directions (5thedn Oxford,2013)
Samuels G, Contract Law Cases and Material (Sweet and Maxwell ,2007)
Duxberry R, The Contract Law ( 2nd edn Sweet and Maxwell, 2011)
Murray R, Contract Law (3rd edn Sweet and Maxwell, 2011)

 Electronic Sources
Case Brief, ‘Roscorla v Thomas’
http://casebrief.me/casebriefs/roscorla-v-thomas/,
accessed on 29 November 2017

Study Note, ‘What is Offer and Acceptance’

http://www.bitsoflaw.org/contract/formation/study-note/degree/offer-overview

accessed on 28th Nov 2017

Table of Cases

 Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256 Court of Appeal

 Brogden v Metropolitan Railway Company (1876–77) L.R. 2 App. Cas. 666
 Roscorla v Thomas, (1842) 3 QB 234
 Adam Opel GMBH And Another V Mitras Automotive (UK) Ltd[2007] EWHC 3205 (QB)
 Hartley v Ponsby (1809) 2 Camp 37; 170 ER 1168 ; 6 Esp 129;170 ER 851
 Willian v Roffey Bros Ltd (1857 7 E & B 872
 Stilk v Myrick [1809] EWHC KB J58 King's Bench Division