438/07,943

- In contract law consideration is concerned with the bargain oI the

contract.
- A contract is based on an exchange oI promises.
- Each party to a contract must be both a promisor and a promisee.
They must each receive a beneIit and each suIIers a detriment. This
beneIit or detriment is reIerred to as consideration.
- Example: Allen signs a contract to buy a bungalow in Midvalley
Irom Kenneth Ior RM 300,000. Allen's consideration is the RM
300,000 and Kenneth`s consideration is the bungalow.

considerotion must be somethinq of vo/ue in the eyes of the /ow
- Thomas v Thomas (1842) excludes promises oI love and aIIection,
gaming and betting etc.
- A one sided promise which is not supported by consideration is a giIt.
- The law does not enIorce giIts unless they are made by deed.

common /ow strict/y odheres to the requirement of considerotion

- hilst the common law strictly adheres to the requirement oI
consideration, although in some instances the courts seem to go to
some lengths to invent consideration
- eg : ard v Byham (1956), illiams v RoIIey Bros (1990) equity
will, in some instances, uphold promises which are not supported by
consideration through the doctrine oI promissory estoppels.

























































Executory Consideration
- Is consideration provided by an act; made in return Ior the perIormance
oI an Act, eg : the oIIer oI a reward Ior an act.
Carlill v Carbolic Smoke Ball Company
- Unilateral oIIer : consideration is provided by the act which is usually the
perIormance oI acceptance.
- Consideration is also the act which accepts the oIIer.
- M promised to sell his mobile phone to K Ior RM550/- and K promised
to pay the price upon delivery by M. Here, the promise to sell is in return
to promise to buy.
Executed Consideration
- Is consideration which has not yet been carried through in Iact; deIendants
promise is made in return Ior a counter promise Irom the plaintiII.
- E.g : an agreement between seller and buyer Ior the sale oI goods Ior
Iuture delivery on credit.
- At the time the agreement has been made, nothing has yet been done to
IulIill the mutual promises oI which the bargain is composed.
- Consideration is that the promise is worth something
- M lost his pen and oIIered RM 200/- to anyone who Iinds and returns the
documents to him. K Iound M`s pen in response to the oIIer and returns
them to M. By returning the pen, K has given consideration to M`s promise
to pay. Should M reIuse to pay, K may take an legal action against him.

!ast Consideration
- II consideration is Iurnished beIore the promise is made, it is not
eIIective.
- E.g: carrying out an act beIore they have made the promise, thereIore
cannot enIorce the promise iI he reIuses to pay. II made, subsequent to
and independent oI the transaction, it must be regarded as a mere
expression oI gratitude Ior past Iavours or as a designated giIt, and no
contract will arise.
- Not part oI any bargain; the act oI the plaintiII was not done in response
to such a promise.
- II K Iinds and returns M`s pen and in gratitude, M promise to pay K
RM200/- the promise is made in return Ior a prior act.

%ypes of Consideration


















1) Consideration must not be past

@he promise is subsequent to the oct
common /ow Post considerotion is no considerotion
Post considerotion moy be vo/id where it wos preceded by o request

ke Mc4rd/e {1951)
Lomp/eiqh v 8roithwoite {115)

Re McArdle (1951)
- Majorie McArdle carried out certain improvements and repairs on a
bungalow. The bungalow Iormed part oI the estate oI her husband's
Iather who had died living the property to his wiIe Ior liIe and then
on trust Ior Majorie's husband and his Iour siblings.
- AIter the work had been carried out the brothers and sisters signed a
document stating in consideration oI you carrying out the repairs we
agree that the executors pay you 480 Irom the proceeds oI sale.
However, the payment was never made.
Held:
- The promise to make payment came aIter the consideration had been
perIormed thereIore the promise to make payment was not binding.
Past consideration is not valid.


Lampleigh v Braithwaite (115)
- The deIendant had killed a man and was due to be hung Ior murder.
He asked the claimant to do everything in his power to obtain a
pardon Irom the King.
- The claimant went to great eIIorts and managed to get the pardon
requested. The deIendant then promised to pay him 100 Ior his
eIIorts but never paid up.
Held:
- hilst the promise to make payment came aIter the perIormance and
was thus past consideration, the consideration was proceeded by a
request Irom the deIendant which meant the consideration was valid.
The deIendant was obliged to pay the claimant 100.


ection 2{b) Promise to compensote who//y / in port promise vo/untori/y
done somethinq for promisor

lMwotherspoon co Ltd v nenry 4qency nouse
kojo of venkotoqiri v ri krishnoyo
@v krishno lyer v @he Officio/ Liquidotor


M4thersp443 & C4 Ltd v He3ry Age3cy H4:se
- They were promises oI compensation made by the D to the P in
respect oI past act. However these promises were not supported by
consideration.
- So, those promises could only be legally enIorceable iI it is a
promise to compensate a person who has already voluntarily done
something Ior the promisor. This is in accordance with Section 26
(b).
Held:
- Voluntarily means the acts perIormed or done by one`s own Iree will
impulse or choice and not constrained, prompted or suggested by
another. In this case, the P had acted on the suggestion oI the D. So
the P`s action could not be said to have been done voluntarily.
ThereIore, the promise made by D to compensate the P was not an
enIorceable contract within the exception oI Section 26 (b).



#ules of
Consideration
Must not be past
Must be suIIicient but
need not be adequate
Must move Irom
the promise or any
other person
An existing public duty
will not amount to
valid consideration.
PerIormance oI duty
At the request oI
promisor


Consideration must move from the promise or other person

ln nq/ish /ow considerotion must move from the promisee ie the person
who receives the promise must himse/f qive somethinq in return ln
Mo/oysio o porty to on oqreement con enforce o promise even thouqh he
hos qiven no considerotion so /onq os somebody e/se hos done so
q 4 promises to poy 8 kM 1000 if c wi// point 4s house c points 4s
house but 4 does not poy 8 the kM 1000 os promised ven thouqh it is c
ond not 8 who hos qiven considerotion for 4s promise 8 moy institute
/eqo/ proceedinq oqoinst 4 to enforce the promise lf o person other thon
the promisee is to provide the considerotion the promisee connot enforce
the oqreement

Je3ata Chi33aya v Jeriataramayya
- A sister agreed to pay annuity oI Rs 653 to her brothers who
provided no consideration Ior the promise. However on the same day,
their mother had given the sisters some land stipulating that she must
pay the annuity to her brothers.
- hen the sister subsequently Iailed to IulIill her promise to pay the
annuity, her brothers sue her on the promise. The sister claimed that
there was no contract between her and her brothers since her brothers
did not give any consideration Ior her promise to pay the annuity.
Held:
- She was liable on the promise on the ground that there was a valid
consideration Ior the promise even though it did not move Irom the
brothers.














1weddle v Ati3s43 (181)
- A couple was getting married. The Iather oI the bride entered an
agreement with the Iather oI the groom that they would each pay the
couple a sum oI money.
- The Iather oI the bride died without having paid.
- The Iather oI the son also died so was unable to sue on the agreement.
The groom made a claim against the executor oI the will.
Held:
- The claim Iailed: The groom was not party to the agreement and the
consideration did not move Irom him. ThereIore he was not entitled
to enIorce the contract.





























The mothei askeu the uaughtei to give money to hei
biotheis; in ietuin the mothei will give some lanu to the
uaughtei. Bowevei, the uaughtei uiu not give money to
hei biotheis anu the biotheis sueu hei foi bieach of
contiact.

Consideration must be sufficient but need not be adequate

@here is no requirement thot the considerotion must be morket vo/ue
providinq somethinq of vo/ue is qiven
eq 1 qiven in exchonqe for o house wou/d be vo/id @he courts ore not
concerned with whether the porties hove mode o qood or bod borqoin

choppe/ v Nest/e
SLurlyn v Albany
hang Swee klm v 8eh l Pock

Chappel v Aestle (19)
- Nestle ran a sales promotion whereby iI persons sent in 3 chocolate
bar wrappers and a postal order Ior 1 shilling 6d they would be sent a
record.
- Chappel owned the copyright in one oI the records oIIered and
disputed the right oI Nestle to oIIer the records and sought an
injunction to prevent the sales oI the records which normally retailed
at 6 shillings 8d.
- II they did it was impossible to ascertain the value they represented
and thereIore Nestle would not have complied with their obligation
to give notice oI the ordinary retail selling price.
- II the wrappers were a mere token or condition oI sale rather than
constituting consideration, then the notice would be valid and Nestle
could sell the records.
Held:
- The wrappers did Iorm part oI the consideration as the object was to
increase sales and thereIore provided value. The Iact that the
wrappers were simply to be thrown away did not detract Irom this.
ThereIore Chappel were granted the injunction and Nestle could not
sell the records as they had not complied with the notice
requirements under s.8.

6enero//y the courts do not ossess the odequocy of considerotion @here is
no qenero/ doctrine of o just price or o foir exchonqe






!erformance of duty

4n express promise to perform/performonce of on existinq pub/ic duty wi//
not omount to vo/id considerotion
where o porty hos o pub/ic duty to oct this connot be used os
considerotion for o new promise

co//ins v 6odefrey {18l1)
6osbrook 8ros v 6/omorqon county counci/ {1925)

C4lli3s v C4defrey (1831)
- The claimant, Collins, had been subpoenaed to attend court as a
witness in separate court case involving the deIendant, GodeIrey.
- GodeIrey had sued his attorney Ior malpractice and Collins was
required by the court to attend as an expert witness.
- In Iact Collins never gave evidence but was required to be on
standby Ior six days in case he was called.
- AIter the trial Collins gave GodeIrey an invoice to cover his time
spent at court and demanded payment by the next day. ithout
giving him the Iull day to pay, Collins commenced an action to
enIorce payment.
Held:
- Collins was under a public duty to attend court due to the subpoena.
here there exists an existing public duty this cannot be used as
consideration Ior a new promise. GodeIrey was not required to pay
him.














estle offeieu a populai iecoiu of the uay in ietuin foi
u anu thiee wiappeis fiom theii chocolate bais.
The Bouse of Loius BELB that the wiappeis weie a
goou consiueiation uespite the fact that the wiappeis
hau little uiiect value anu weie in fact thiown away.
ouefioy piomiseu to pay Collins if Collins woulu attenu
couit anu give eviuence foi ouefioy. Collins hau been
seiveu with a subpoena (ie, a couit oiuei telling someone
they must attenu). Collins sueu foi payment. It was helu that
as Collins was unuei a legal uuty to attenu couit he hau not
pioviueu consiueiation. Bis action theiefoie faileu.
) At the request of promisor
Dn/ess the promisor qoes beyond their duty

Casbr44 Br4s v Clam4rga3 C4:3ty C4:3cil (1925)
- The deIendant owners oI a colliery asked the police to provide
protection during a miner's strike. The police provided the protection
as requested and provided the man power as directed by the
deIendants although they disputed the level oI protection required to
keep the peace.
- At the end oI the strike the police submitted an invoice to cover the
extra costs oI providing the protection. The deIendants reIused to pay
arguing that the police were under an existing public duty to provide
protection and keep the peace.
Held 3:2 decision:
- In providing additional oIIicers to that required, the police had gone
beyond their existing duty. They were thereIore entitled to
payment/maintain an action on the promise.



An existing contractual duty will not amount to valid
consideration

lf o porty hos on existinq controctuo/ duty to do on oct this oct connot be
used os considerotion for o new promise
Promisee mere/y undertokes to fu/fi// the conditions of existinq controct
with the promisor

ti/k v Myrrick {1809)
nort/ey v Ponsonby {1857)

$til v Myrric (189)
- The claimant was a seaman on a voyage Irom London to the Baltic
and back. He was to be paid 5 per month.
- During the voyage two oI the 12 crew deserted.
- The captain promised the remaining crew members that iI they
worked the ship undermanned as it was back to London he would
divide the wages due to the deserters between them. The claimant
agreed. The captain never made the extra payment promised.
Held:
- The claimant was under an existing duty to work the ship back to
London and undertook to submit to all the emergencies that entailed.
- ThereIore he had not provided any consideration Ior the promise Ior
extra money. Consequently he was entitled to nothing.

&nless the party goes beyond their existing duty:
@ot meon un/ess the existinq controct is terminoted ond o new oqreement
substituted ot o hiqher rote of poy or if the promise hod been mode to
comprise o dispute or if uncontemp/oted risks hod orisen

Hartley v P43s43by (1857)
- HalI oI a ship's crew deserted on a voyage. The captain promised the
remaining crew members extra money iI they worked the ship and
completed the voyage. The captain then reIused to pay up.
Held:
- The crews were entitled to the extra payment promised on the
grounds that either they had gone beyond their existing contractual
duty or that the voyage had become too dangerous Irustrating the
original contract and leaving the crew Iree to negotiate a new
contract.





Lomp/eiqh v 8roithwoite
keponq Prrospectinq Ltd v chmidt

Kep43g Pr4specti3g v $chmidt
- Schmidt, a consulting engineer has assisted in obtaining a permit Ior
iron ore in the State oI Johor. He also helped in the subsequent
Iormation oI the Company, Kepong Prospecting Ltd.
- AIter the Company was Iormed, an agreement was entered into
between them under which the Company undertook to pay him one
percent oI the value oI all iron ore sold Irom the mining land. This
was in consideration oI the services rendered aIter incorporation but
beIore the agreement.
Held:
- The Court held that this was suIIicient in law to constitute valid
consideration even though they were clearly past. ThereIore,
Schmidt was entitled to be paid Ior his services even though it was
clearly past.
Exception to requirement of consideration

4n oqreement is void if without considerotion un/ess

o) written+reqistered {if required) + noturo/ v
/oveoffection + in neor re/otion
ke 1an Soh S|m
b) compensote who//y/in port +promise vo/untori/y
done somethinq for promisor
,Jotherspoon
c) written + siqnoture by debtor

Re 1a3 $4h $im
- The deceased Tan Soh Sim (TSS) in her last illness had expressed a
wish that her estate should be divided among her 2 adopted sons and
2 adopted daughters. The legal next-oI-kin oI TSS, 3 sisters & 7 halI
sisters and brothers, respecting his wish, made a contract renouncing
all their rights in Iavour oI the 4 adopted children.
- The issue was whether the contract was made on account oI natural
love and aIIection and whether the legal next-oI-kin oI TSS are in
near relation to their adopted nephews and nieces.
Held:
- Chinese adopted children are related to the adoptive parents and
brothers. However they are not nearly related to the Iamily oI their
adoptive mother. ThereIore, the legal next-oI-kin oI TSS were not in
near relation to the 4 adopted children oI TSS. Thus there was no
valid oI natural love and aIIection between them and the contract
was invalid.












whether o fomi/y orronqement is o vo/id controct

1a3g Me3g H4c v 1a3 Mi3g $e3g (21)
- The deIendant is the plaintiII's elder brother (Ming Seng) and
executor oI their late Iather's will.
- Ming Seng was to get 15 oI the sale oI a property, while Meng
Hock was to get RM10,000 and the remaining proceeds to be
distributed at Ming Seng's discretion.
- Ming Seng and Meng Hock entered into an Iamily arrangement
whereby Ming Seng agreed to give Meng Hock RM60,000, an
apartment and a piece oI land and in return Meng Hock agreed not to
make any Iurther claim against the him or their Iather's estate.
- Ming Seng delivered everything but the land. Meng Hock demanded
that he IulIil his promise and deliver the land but Ming Seng
declined and instead unilaterally revoked the Iamily arrangement.
- Meng Hock Iiled an action Ior breach and Ming Seng
counterclaimed, seeking a declaratory order that the Iamily
arrangement was void.
Decision:
- The intention oI the parties had been clearly set out.
- Court held that such an arrangement is not void iI expressed in
writing and registered under the law, iI any, Ior the time being in
Iorce Ior the registration oI such documents.
- The Iamily arrangement has been in writing, duly stamped and
registered with the endorsement oI the Stamp OIIice.
- The phrase "natural love and aIIection" cannot be read in isolation
and must be linked to the requirement that the parties be "standing in
a near relation to each other". Being biological brothers satisIies this
requirement.
- The Iamily arrangement is valid and enIorceable. Appeal dismissed
with costs.