The doctrine of consideration

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Contract law in popular jurisdiction of law is premised on a necessary distinction between a gratuitous promise and a contract. Therefore, while in the domain of civil law the notion of causa permissions is used to ascertain which promises are enforceable, the common law utilizes the consideration doctrine which needs the availability of a bargain made between the involved parties. However, contracts are neither infallible nor written on stone tablets. For many reasons,  at some point, the need to modify a contract can occur during their implementation. The main hurdle for the contractual modification informed is the overall rule that the existing obligation performance cannot suffice as a better consideration for a promise (Steinberg, 2013, p.256). Therefore, the matter of contractual modification enforceability leads to two primary principles, which are core in any contract law system. These are the freedom of contracting on whatever terms or whomever an individual determines and the requirement of protecting parties that are vulnerable from contracts resulting from exploitation. In this respect, the paper will discern various aspects of contract law such as it the doctrine of consideration using various relevant case laws and the doctrine exception.

The Doctrine of Consideration

The most fundamental proposition of the contract law revealed that contractual obligation was only experienced when promises were part of the agreement/deal where all the parties within the agreement pledged to perform in accordance to the laws of the doctrine while supporting each other’s goals. It was a principle of thought, and its dynasty was faultless. Initially, there was no doctrine from the standard contract's law that had been settled or agreed upon as there was a lot of consideration to be put in place. Therefore, this doctrine contains ideas that involve a mutual relationship that depends on the long history of the law of contract that had existed for many centuries. The English law of medieval demanded a general prerequisite on this type of liability that was widely considered as mainly contractual.

Criticisms of Consideration

Many kinds of literature had a comprehensive view on the consideration of this doctrine based on its depth and the level of the hostility it had attracted. As a result, the abolition of this doctrine had been recommended by many people in the legal profession. For example, Wright inquired whether the doctrine of consideration should be abolished or not. The “English Law Revision Committee” on the Statute of Frauds together with the doctrine of consideration recommended that the pledges should be easier to implement without any limitations. The report enforced by the Contracts articulated on the Third Parties' rights.

The 1999 Act proposed that third parties that had qualified should be allowed to prosecute a contract even though there were no reasons for them to be considered. According to the “English Law Commission,” the doctrine of consideration was a suitable issue for the future’s separate review. Moreover, there was an appeal by a judge from the court of Singapore in Gay v Loh [2009] (Cuniberti, 2013, p.445).  The judge remarked in the court by stating that the doctrine is redundant and old-fashioned while its functions may be met when alternative and effective means are used for implementation. These included the doctrines of the promissory estoppel, the internship to create legal relations, and the deprived factors under pressure, unconscionable and the extreme influence.  

One-Sided Modifications

The most focused issue to be criticized in the previous years is the one-sided consideration of the contract modification. In one-sided contract, one party pledges to provide more in a similar reciprocal obligation, which is an additional modification, or instead receive a low reciprocal obligation, which is a subtracting obligation on the other party. In the case of Still, v Myrick (1809) and Foakes v Beer (1884) that stood for a conservative answer suggested that those modifications could not be implemented (Chang, and Wu, 2014, p.1112). It is because the promises were never delivered by the legal benefits on the modification process. Equally, it took longer to perform on what they had already decided. The incident was termed as "the most harmful distortion"which has divided attention on the central idea of bargaining that was based on “the grounds duty to enforce promises.” As the debate on protection of the sacredness of contract together with prevention of exploitation against enforcement of the project, the actual reality was that the changes in the circumstances might have made it impossible to implement the contract without adjustments. Furthermore, the principles of cooperation, efficiency, and mutual accommodation might have also stimulated one-sided enforcement in case the other party was faced with trouble.

The Need for Legal Benefit

The barrier of consideration was controlled in Williams v Roffey through widening the extent of thoughts (Roberts, 2017, p.340). Subsequently, in Collier v Wright it was controlled by evading consideration and adopting more extensive standards of promissory estoppel and also recorded in Antons Trawling and Gay v Loh by terminating the demands for consideration (Ricks, 2013,p.315). The three strategies are interrelated since there was a protocol of application based on priorities. Widening the consideration reduced the chances of prevention using promissory estoppel, however, upon its elimination, the promissory estoppel becomes redundant. The three strategies are opened to criticisms, in case there is a more functional and effective analysis then these strategies should be abandoned.

Re-Promising as Practical Benefits

Williams v Roffey case attests the needs for fresh consideration to add promises. However, it appeared as a mere promise that the promisee pledged to implement on the current contractual duties where the promisor receives benefits during the implementation. The principles of economic enforcement could help prevent the dangers of opportunistic exploitation. As explained by Cuniberti (2013), the critical problem appear when the re-promise performs the duties of the promisee, leaving the promisee jobless. The assurance obtained from the re-promise is sentimental and might bring confusion between benefits and motives. Thus, improved chances of performing would not have a positive impact in case the promisee failed to work. If the promisee owns the promise to pay, then this operation would fail and worsens the present situation more than the initial state.      

Real Performance as a Practical advantage

There has been widespread discontent with conventional bar primarily on the “one-sided modifications.” Many people as seen in the case of Williams v Roffey deny that”one-sided modifications” are gratuitous (Roberts, 2017, p.340). Therefore, subtracting and adding promises should only be enforceable as long as the promisor receives in actuality the stipulated part of the initially agreed amount. Contrary to Williams v Roffey ratio, a mere promise is perceived as insufficient, and a limited notion and the practical benefit comes in play. Accordingly, this necessitates the identification that the right that is enforceable is less beneficial than its real performance. Nonetheless, other people objects this reasoning because it seems to contradict the concept of a contract to form a binding obligation and to support the “Holmesian heresy” that contracts must pay nonperformance damages.

Nonetheless, in contract, law one of the exception to the doctrine of consideration is the doctrine of promissory estoppel. The doctrine of promissory estoppel is always an alternative to the consideration doctrine. It denotes a contract in which both the parties involved are not in a position to withdraw just because one party acted on the promise of the other party. In most instance, if one party served injustice or was harmed due to the broken promises, which they depended on, the promissory estoppel functions as a legal shield, against the claim of the other party even if no consideration was provided. Therefore, the doctrine of promissory estoppel implies that any contracted premises can be enforced by law even without the presence of any consideration. Nevertheless, it is imperative to understand that promissory estoppel can only be applied as a legal defense and not to start any form of the constitutional claim.

Conclusion

In conclusion, this paper has discerned the different aspects of the doctrine of consideration by using various case laws. As seen above, the doctrine of consideration entails ideas that involve a mutual relationship, which depends on the long history of the law of contract that had existed for many centuries. However, there are many criticisms regarding it leading to some exceptions or alternatives such as the doctrine of promissory estoppel. It signifies a contract in which both the parties are not able to withdraw just because one party acted on the promise of the other. Nevertheless, this doctrine can only be used for legal defense not to begin a legal claim.

References

Chang, S.J. and Wu, B., 2014. Institutional barriers and industry dynamics. Strategic Management Journal, 35(8), pp.1103-1123.

Cuniberti, G., 2013. The international market for contracts: the most attractive contract laws. Nw. J. Int'l L. & Bus., 34, p.455.

Ricks, V., 2013. Consideration and the Formation Defenses. U. Kan. L. Rev., 62, p.315.

Roberts, M., 2017. MWB Business Exchange Centres Ltd: The Practical Benefit Doctrine Marches On. The Modern Law Review, 80(2), pp.339-351.

Steinberg, L., 2013. Does recent research on adolescent brain development inform the mature minor doctrine?. Journal of Medicine and Philosophy, 38(3), pp.256-267.

December 12, 2023
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