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Consideration should not be past
When an act is followed by a promise, the law thinks that nothing is offered in exchange for the promise, and so the act is not considered. This is referred to as past considerations
Key term: Past Consideration
Performing an act before making a commitment does not constitute thought and does not bind the promise.
Donald finds an escaped cow in the village and takes it to Linda the owner of the nearby farm. Linda expresses gratitude to Donald for returning her missing cow, offering him a £20 reward. After several weeks, Linda still has not paid Donald’s prize. Is Donald able to sue Linda for £20 based on a legally binding contract? The answer is "no." According to English law, Donald did not fulfill Linda’s promise Donald completed the act before Linda promised to give him £20. If there is no transaction between the parties, the agreement is void due to lack of consideration.
When using the previous request device, the past consideration rule is not applicable. The previous consideration rule does not apply when the parties agree to pay for one party's actions, with the specific sum determined later. This exception is known as the 'prior request' device. This term refers to when someone agrees to undertake an act at the request of another person in exchange for remuneration or benefits. If these elements are met and the promise would have been enforceable if made before or during the request, the act performed prior to the promise is considered.
In 2008, Arina approached James, a marketing consultant, for assistance in promoting a vegan drink called Water Juice. James spent two years promoting Water Juice to increase the brand's value. In 2015, Arina agreed to give James 30% ownership of the Water Juice brand. After Aruba’s death, her husband refused to honor the agreement, claiming that James’ consideration was no longer relevant and hence not legally binding. Is James’ contract legally binding? The answer is yes because the criteria for the previous request device were met. James did the act at Arina’ request. Furthermore, James and Arina were engaging in a commercial context where they were typically compensated for their efforts. These factors indicate that both parties agreed that James would be compensated for his labor.
When an act is followed by a promise, the law thinks that nothing is offered in exchange for the promise, and so the act is not considered. This is referred to as past considerations
Key term: Past Consideration
Performing an act before making a commitment does not constitute thought and does not bind the promise.
Donald finds an escaped cow in the village and takes it to Linda the owner of the nearby farm. Linda expresses gratitude to Donald for returning her missing cow, offering him a £20 reward. After several weeks, Linda still has not paid Donald’s prize. Is Donald able to sue Linda for £20 based on a legally binding contract? The answer is "no." According to English law, Donald did not fulfill Linda’s promise Donald completed the act before Linda promised to give him £20. If there is no transaction between the parties, the agreement is void due to lack of consideration.
When using the previous request device, the past consideration rule is not applicable. The previous consideration rule does not apply when the parties agree to pay for one party's actions, with the specific sum determined later. This exception is known as the 'prior request' device. This term refers to when someone agrees to undertake an act at the request of another person in exchange for remuneration or benefits. If these elements are met and the promise would have been enforceable if made before or during the request, the act performed prior to the promise is considered.
In 2008, Arina approached James, a marketing consultant, for assistance in promoting a vegan drink called Water Juice. James spent two years promoting Water Juice to increase the brand's value. In 2015, Arina agreed to give James 30% ownership of the Water Juice brand. After Aruba’s death, her husband refused to honor the agreement, claiming that James’ consideration was no longer relevant and hence not legally binding. Is James’ contract legally binding? The answer is yes because the criteria for the previous request device were met. James did the act at Arina’ request. Furthermore, James and Arina were engaging in a commercial context where they were typically compensated for their efforts. These factors indicate that both parties agreed that James would be compensated for his labor.
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