Hi, you're listening to the Australian Law Student Law Info
podcast. Your go to podcast for legal
insights in 4 minutes or less. I'm Nick Hodgkinson and today
we're talking about consideration.
But first, our obligatory disclaimer.
The law info is produced by law students.
For law students it is not, nor is it intended to constitute
legal advice. If you require legal assistance,
you should contact your local Law Society who can direct you
appropriately. For more information on the
Australian Law student, visit our website at the Oz Law
student.com OK Consideration. It's our second episode on
contract law. Consideration is the lifeblood
of contracts and encompasses of benefit, detriment, performance
or forbearance, voluntarily incurred and ancillary to a
promise without consideration. A promise becomes a mere nudim
pactum and is devoid of legal force.
However, you should note that consideration is not required if
the promise is made under seal or deed right.
Let's explore 2 approaches to understanding consideration.
The benefit detriment approach understands that the premacy
must either confer a benefit on the promise or or incur a legal
detriment by surrendering or forgoing something.
This concept is illustrated in Beaton and Mcdivitt, where
consideration involves either a benefit accruing to one party or
a detriment being suffered by another.
The alternative approach is the quid pro quo bargain approach,
where the bargaining promise must be made quid pro quo, with
the ACT constituting acceptance. It's performed in reliance on a
promise will give rise to an estoppel as demonstrated in
Australian woollen mills, and Commonwealth courts will
typically refrain from assessing the adequacy of consideration
except where it is illusory. As seen in Woolworths and Kelly,
past consideration given prior to a promise isn't good
consideration. As established in Ross Scholar
and Thomas, the existing legal duty rule often surfaces in
contract modifications where fresh consideration is required
to enforce a modified agreement, and you should refer here to
Stillk and Marrick are, however, a handful of exceptions to this
existing legal duty rule. For example, if fresh
consideration is provided for the fresh promise, the modified
agreement becomes enforceable to Hartley and Ponsonby 2nd.
A practical benefit obtained by modifying a promise to pay more
for the beneficiary's performance under the original
contract will also constitute good consideration, as
exemplified in Williams and Ruffy Bros and Nichols
Contractors. Conversely, practical detriment
incurred by modifying a promise to accept less than the
beneficiary's original performance is also considered
good consideration. As in Muzamichi and Winadel
promises to third parties, bonafide compromises and part
payment of a debt will all have their exceptions to the existing
legal duty rule, and this showcases the nuanced nature of
consideration in contract law. And there you have it, a
comprehensive exploration of consideration in 4 minutes or
less. Join us next time on the
Australian Law, Student Law, and Four podcast.
As always, if you have any suggestions, please e-mail us at
team@theozlawstudent.com or leave a comment in your review
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