Can the Performance of Existing Duty Amount to Consideration?

What is performance of existing duty? Its means that makes a promise to another person in order to exchange for the others promise or performance of something that the other person is already obligated to do. Can the performance of existing duty amount to consideration; and how much does it will amount to consideration? Therefore, in initially we should understand what is consideration is about. Consideration is a benefit to a promisor but it is a disadvantage to the promise or maybe for both. In the case Currie v Misa (1975) ,it was stated that ” consideration existed when there was some right, interest, profit or benefit accruing to one party, or some forbearance, detriment, loss or responsibility, given, suffered or undertaken by the other one.” Both parties must agree for a contract. For example, you cut my hair and I give you RM5 for the cutting service. I give you my car and you give me RM1000. Existing duty is that a promisee is already bound to perform an existing legal duty.

2.0 Body of Content

2.1 Consideration

What is consideration means by? The words “consideration” are used in the law of contract in a technical way. “Consideration does not carry its common meanings of kindness and thoughtfulness to others. Indeed, such features are not recognized by the law, since they are not “valuable”. For example, the word is used in the following sense: “Will you do this thing for me?” Answer: “Only for a consideration”. In other words, I will not do it for nothing, but only in return for what you give me. Besides that, the consideration must be in the situation of sufficient and it is no need to be adequate as long as both parties be in agreement, in the case of Chapell v Nestle (1959) 2 All ER 701, HL shows that the things that returned by Nestle to Chappell although are small in value, but those still can be a good consideration. A consideration must be something of value, something you wouldn’t ordinarily have but for the agreement, it may consist of an action such as the handing over of goods in a retail shop, or the money for them; or else it may be consists of a promise. For instance, if someone buying something and pay immediacy without delay that is called executed consideration. It was because an executed consideration consists of a completed action. Moreover, the other type of consideration is an executory consideration. It is executory when one promise is made in return for another. For example, a promise in return for a promise; when X agree to sell Y a car and Y promises to pay RM2, 000 for it. A consideration is executed when a promise is made in return for the performance of an act. For example, X offers RM 100 to anyone who finds and returns his camera which he has earlier lost. But Y had finds and returns the camera in response to the offer. Y’s consideration for X’s promise is executed, and only X’s liability remains outstanding. The last consideration is the past consideration; a past consideration consists of something that had happened. A subsequent promise to pay for its unenforceable. A past consideration is a good consideration; it is because after the performance for a duty, the past consideration can be appeal in the Malaysia courts. For example, when A promise B to give B a goods but at the end, B din get anything from A. Therefore B can sued A that A do not fulfill his or her promise. This can be happen in Malaysian Law, act prior to the promise would be sufficient to constitute consideration even though it is clearly past.

2.2 Performance of existing duty for domestic or social

In the case Thomas V Thomas (1842) 114 ER 330, a testator, shortly before his death, had expressed the wish that his widow should have the use of his house during her lifetime as long as she did not remarry. His executor agreed to allow her to occupy the house in return for her promises to pay 1 pound per year and to keep the premises in good condition. The executor as a defendant subsequently refused to allow her to have the house. Since the widow paid rent, so there is something is value and kept the premises in good condition, therefore the contract is enforceable.

In the case of Balfour V Balfour (1919) 2 KB 571, CA. The parties were married in 1900 and went to Ceylon where the husband had a government post. In 1915, the couple returned to England for holiday and the husband return to Ceylon at 1916 but the wife is still stay at England because of on medical grounds. Before thee husband left he made an oral promises to his wife to pay her 30 pound per month. The parties subsequently separated and eventually divorced. The wife sued the husband for breach of contract for arrears due under the agreement. The judgment was given for he husband that no money to be paid. It was because there was no legal contract as the parties as husband and wife did not intend legal consequences to their arrangement.

2.3 Performance of existing duty for commercial and public

Base on the traditional perception, performance of an existing duty should be constitute a consideration in this case Stilk v Myrick (1809) 170 ER 1168, KB. From the case itself, there is 11 seamen on the ship but 2 of the seamen were deserted their ship during their voyage. Therefore, the duties of those 2 seamen have to find theirs replacement to replace their jobs. Since its hard to find replacement for the 2 deserted seamen, as a result the captain offer the rest of the ship’ seamen share the wages of the 2 deserted seamen equally as it was safety back to London. At last they already safety ship back to London but the 9 seamen was get nothing. Because the captain did not fulfill his promise as what his mention on the ship. Therefore the 9 seamen feel unsatisfied that what captain had threat them, so they sue the captain. But the court judgment stated that the 9 seamen is based on the work of existing obligations, shipped back to London, and promised to take all emergency needs. Therefore, captain need not provide additional funding commitments, any consideration. Therefore he is entitled to nothing. Therefore the captain could not be sued.

Base on the orthodox view, performance of an existing duty should be constitute a consideration in the case of Hartley v Ponsonby (1857)119 ER 1471, QB. A ship of 36 seamen was out from England. On the ship, there are 19 of the seamen was deserted including 5 able seamen. It is interest that compare with the last case Stilk v Myrick 1809. In both cases, the captain also offers the same thing to the rest of the seamen; captain do promise will pay more wages if they would sail the ship home. Finally they safety reach London, and he promise that will pay the extra wages to those who had help them back. But at the last, the captain doesn’t what to pay. In both cases, the captain also did not pay and the seamen also want to sued the captain. But this time is a bit different ,because big amount of people was defected ;therefore the workload for the rest 17 people have to take place for that 19 people as well. So, the 17 seamen is working under a dangerous situation, it is already over for them. Therefore, the captain’s promise should be constitute as a consideration compare with the 1st cases. The court said this promise was enforceable, so the captain is lost.

In my opinion, I will prefer to agree that performance of an existing duty can constitute consideration.

3.0 Conclusion

Consideration is an essential feature of each simple contract. Consideration consists of the element of exchange between the parties to the contractual agreement, and maybe described as “the price of a promise”. Beside that, consideration maybe executor or executed. “Executory” means in promissory form, something to be done in the future. Executed consideration consists of a completed action. To be valid, consideration must have some value in the eyes of the law. it may consists of actions, or form of property. Where a person is under an existing contractual duty or a public duty to perform some act, such performance cannot be the consideration for a contractual promise.

Question 2

1.0 Introduction

1.1 Definition of Law

There are various definition and description of “law”, in general, and “laws”, example of the law in particular. Many other definitions and description can be found, but all commentators on law in general agree that the concept and existence of “law” is a characteristic, past, and present. Law is a set of rules and regulation obeyed by community and recognized them as binding. And recognized them as binding valid.

1.2 Contract

A contract is an agreement which is legally binding between the parties and it will be formed when two or more parties make an agreement and intention to create legal relation, thus there must be a process of offer and acceptance. It is able to protect parties in order to keep the promise without any damage. In additional, the contract able to identify the duties of each party who involves in the performance.

Once the contract is form, the next days is determining the nature and extend of the obligation incurred by the parties. The obligations are call the terms of the contract. Therefore contracts consist of binding promises as well as acts.

The range of contracts encompasses small commonplace consumer transactions, through to intricate and complex transactions involving millions of dollars. They all share some basic characteristics or elements. These characteristics or elements are the general principles of all contracts.

2.0 Body of Content

2.1 Formation of Contract

2.1.1 Offer

An offer refers to that a person is willing to enter into a legal contractual relationship. An offer can usually be identified by some indication of a willingness to be bound and an awarenes that the other party’s acceptance of this proposal will produce a contract, rather thn simply starting off negotiations or trying to interest the other party. An offer can be made by spoken words, in writing, by conduct, or by a combination of any of the above. Bilateral offer can take the form of a promise to do something in return for the promise of the offeree to do something. Unilateral offer is one of the sided promise to pay, someone for performing and act. It is because it is make without the offer law knowing who the offeree in the case of Carlill v Carbolic Smoke Ball (1893)1 QB 25.

Moreover, the invitation to treat; inviting others to make offer but it cannot be accepted as in form a contract. It is because the person cannot extend the invitation to bound the accept to any offer had made to them. In the case of Fisher v Bell (1960) 3 All ER 731, DC, the shopkeeper display the knife in the window shop, it is inviting customer to buy for it, it is not an offer but an invitation to treat.

2.1.2 Intention to create Legal Relation

There is two agreements in intention to create Legal Relation, there are domestic and social agreement, and commercial agreement. Domestic and social agreement is presumption the parties do not intend to create legal relations. In the case Balfour v Balfour (1919) 2 K.B. 571, there is no legal contract. It is because the husband and wife did not intend legal for their agreement. In the case of Merritt v Merritt [1970] 1 WLR 1211, the husband apply the Balfour v Balfour case and said that the husband and wife arrangement not being agreement. At the end, Mrs Merritt had won in the case because she had paid off the mortgage as stated in the agreement; this is the evidence to prove. Commercial agreement can be shown in the case of Edwards v Skyways (1964). The court stated that “the promise and agreement had no legal effect because there was no intention to enter legal relations.”

2.1.3 Acceptance

The acceptance is an offer is the final and unqualified assent to the term of the offer. A contract can not be completed without acceptance to deal with. For example party A made an offer to party B, but the party B has the right to accept or reject the offer that made. When offeree B accepts the offer given by the offeror A. Acceptance will make the contract binding when it is concluded. In the case of Felthouse v Bindley (1863) 142 ER 1037, Exch Ch., the defendant was sued for conversion because the plaintiff was claiming that the horse is his property. The courts stated that the plaintiff letter was an open offer that had not been accepted. It is important to have acceptance to bind the contract because it must be expressed or communicated by the offeree to the offeror in order to have a mutual understanding to make a promise binding. Without the acceptance being communicated, the offer will be rejected.

A counter offer refers to offer amended. In the case of Hyde v Wrench (1840) 49 ER 132, Lord Langdale MR, the court have said that is no contract existed since the plaintiff made offer by own and the defendant cannot be accept.

2.1.4 Consideration

Consideration is an important element in the form of a contract. Consideration refers to both parties exchange value with the agreement. A consideration must move from the promise instead of promisor. It is state that the performance of consideration must performed by promise. Also, it no need adequate but sufficient. Furthermore, a good consideration isn’t come from past consideration because of the promise can’t be made after performance. For example in the case of Chappell V Nestle (1959) 2 All ER 701, HL., in this case the Nestle Company want to offer their three chocolate wrappers to exchange the Chappell musical but this musical have the copyright for the owner. Therefore the both party have exchange value, this is valuable consideration.

3.0 Remedies for breach of contract

In the remedies for the breach of contract is applicable when the contract is breached or not being fulfilled. On the other hand, when one party has declined his contractual obligations, remedies will open up to compensate or replace a considerable value of the breach in contract; and it is depends the seriousness of the breach of contract. There is various form of remedies available for a breach of contract, there are rescission, damages, specific performance, injunction, and restitution.

3.0.1 Rescission of the contract

Equitable remedy of rescission able utilized to describe in two conditions. The first condition is since the contract is turned into negatively when there is mispresentation, fraud and coercion and the party has entered into it, thus it can be rescission to cancels the contract to enabled this contract as never existed and to protect the innocent party. Another condition is party can sue when another party make a contract but it carries out in the future obligation to an end. For example case of Planche v Colburn (1831) 8 Bing 14; 131 ER 305.

3.0.2 Damages

Damages are the main remedy and it is created to compensate the innocent party in any consequence of the breach of contract. However, if there is no any proved of the loss, then the injured party will only can claim the nominal damages which mean it is a small amount of compensation. According to Section 74 of the contract at 1950 states that, the innocent party able to receive compensation from the one who broken the contract. However, in the case of Hadly v Baxendale (1854) 9 Ex 341, it has lay down the common rule. The court held that there is no any condition to said that if Baxendale does not deliver on time, it will cause Hadly loss profits, therefore, Hadly has no entitle to this damage.

3.0.3 Specific Performance

It is refer to the court can utilize it when there is no any remedy can compensate adequately to the other party. In some circumstances, the court only will grant that which is when the property in the contract is unique for example real estate. Also, the court can utilize it on the damage which caused by non performance when there is no standard. Besides that, if the act agree does not perform and cause the plaintiff can’t get the adequate relief and also where the act does not fulfill the performance of the trust. For example Mennonite Land Sales Co Ltd v Friesen (1921).

3.0.4 Injunction

An injunction is an order that made by court when an individual is required to enable other parties prohibit permanently or temporarily in doing something and prevent from the doing if the act in the future. In addition, it can state that money damages are unable to address all problems. For instance in the case of Warner Brothers Pictures v Nelson (1937) 1 KB 209.

3.0.5 Restitution

It is refer to the party able to get back the reward of the part he done which based on the contract even though hasn’t complete the entire performance or it can be utilized when the offeror has done his performance but can’t receive any benefit from the offree because of contract hasn’t existed. As a result, it just likes the act of restoration. Furthermore it can be considered as to remove the benefits of the defendant rather than give compensation to the plaintiff who is the innocent party or suffering on loss. For example in the case of Attorney General v Blake ( 2001) 1 AC 268.

4.0 Conclusion

Contract are legally binding agreements. They raise obligations on the parties to them to each other. If these obligation are not fulfilled, the parties may take legal action to enforce them or obtain other remedies for breach of contract. Contract may be the subject of legal action if they are performed wrongly. Therefore contracts consist of binding promises as well as acts. The contents of contract is vary in importance, its because this affects the remedies avaiable against those in breach. There is 4 basic elements for all the formation of contract. That’s : intention to create legal relations, offer , acceptance and consideration. Contract can easily to be form as long as there is evidence of their existence and contents.