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In Re Casey's Patents: Stewart v Casey (1891) CA*
This case concerns the enforceability of a promise to share patent ownership based on past consideration.
I. Facts:
The plaintiff argued the promise was unenforceable because the defendant's consideration (his work) was past consideration. This means the work was completed before the promise was made. Generally, past consideration is not sufficient to make a contract binding.
III. Court's Holding:
The court rejected the plaintiff's argument. The promise was deemed enforceable.
IV. Bowen LJ's Reasoning (Key Concept):
Bowen LJ articulated a crucial exception to the past consideration rule:
Even if consideration appears to be past, it can still be valid if it satisfies these conditions:
This case concerns the enforceability of a promise to share patent ownership based on past consideration.
I. Facts:
- Patents: Plaintiff and partner registered two patents for storing volatile liquids (July 1887).
- Defendant's Involvement: Defendant worked on commercializing the patents.
- Promise (Jan 29, 1889): Plaintiff and partner promised the defendant a 1/3 share of the patents in consideration for his services as "practical manager." Crucially, this work had already been performed.
- Partner's Death: Plaintiff's partner died (Sept 1889).
- Register Entry: Defendant registered his 1/3 claim (Dec 1889).
- Lawsuit: Plaintiff sought to remove the defendant's registration.
The plaintiff argued the promise was unenforceable because the defendant's consideration (his work) was past consideration. This means the work was completed before the promise was made. Generally, past consideration is not sufficient to make a contract binding.
III. Court's Holding:
The court rejected the plaintiff's argument. The promise was deemed enforceable.
IV. Bowen LJ's Reasoning (Key Concept):
Bowen LJ articulated a crucial exception to the past consideration rule:
- Implied Promise: Past services can constitute valid consideration if there was an implied promise of payment at the time the services were rendered. The subsequent promise (the letter offering the 1/3 share) then serves to fix the amount of that implied remuneration.
- Two Interpretations: The court viewed the later promise in one of two ways: (1) An admission of a pre-existing debt (the implied promise), or (2) A positive bargain definitively setting the payment for work that was understood to be paid for at the time.
Even if consideration appears to be past, it can still be valid if it satisfies these conditions:
- The services were performed on the understanding that they would be paid for. (Implied promise of remuneration).
- The subsequent promise merely fixes the amount of payment.
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