Existing Consideration Contract Law

Welcome back everybody to our conversation on the issue of consideration. Now we've been focusing over the last few lessons on various different elements of the law relating to consideration and this lesson is going to talk about the concept of existing consideration. So fundamentally the question that is asked is to what extent could some existing obligation represent a form of new consideration in the creation of a contract? Does this automatically represent a sufficient amount of consideration for the purposes of creating a contract? Now when we think about what consideration actually is and how it works we know that the element of consideration that is something that we think about is that consideration ought to represent some kind of detriment or forbearance. What we mean by this is that when we are doing consideration it's an exchange of promises either to give something or a promise to do something for some other individual. If I purchase something from a shop okay then the consideration that is here is that the person who owns the shop is giving me some item of value and I am doing so in exchange for money. Now this represents a detriment. I am losing money in the gaining of this thing that I want to buy. I have to give up some of my money to do so. That's what we mean by some kind of detriment or forbearance. Something that is depriving you of something that you have whether that be some kind of money if it's an object that you are giving over or even in some cases whether it's your time and your energy in terms of performing some kind of service. With this in mind therefore when it comes to the performance of an existing action i.e. something that you are already doing then this does not usually amount to sufficient consideration for a new promise. So if we are thinking about creating a new contract and we're thinking about the consideration for that new contract if I say well I'm for my consideration for my end of the bargain if you will what I'm going to do is continue to do the thing that I'm already doing. This usually does not amount to sufficient consideration for a new contract if I was just going to carry on what I was doing. When we think about new consideration, sufficient consideration for a new promise, we have to think about a new detriment and a new forbearance in relation to the action that we are performing. The courts have also held that the performance of a duty for which you are statutorily obliged to do also cannot amount to a new consideration. So if you were under a duty to perform an action anyway under for example statute then that cannot represent consideration because while it is a detriment to an extent or a forbearance it is still something that you would have been required to do regardless of whether or not a contract was in place or whether it was not in place. And to illustrate these points let's look at a couple of cases. The case here of Collins and Godefroy from 1831. This case involved a court proceeding where the claimant was called by subpoena to give evidence. They were subpoenaed so they were under an obligation to go and give evidence. An agreement was made between the claimant and the defendant in this case who was also the defendant in this case that we're talking about here, that he would give evidence in court because he believed that this would be useful to his case. When the claimant turned up to court but was never called upon to give his evidence he requested payment for which the defendant refused. So we have a couple of points here. So they made an agreement, a contractual agreement or at least on the part of the claimant they argued it was a contractual agreement that if you come and give evidence in court I'll pay you some money. This is because the defendant believed that well if this person gives evidence in court then that's going to look favorably on my defense. When it turned out that the court never called upon him to give evidence he still requested the payment because he turned up to court but the defendant responded by saying well no not only is there not a contract here but you didn't fulfill your obligation of giving evidence. The main issue here though was whether or not there was a valid claim for breach in the case that he had made an agreement with the defendant to turn up and give evidence. Now it was held that there was not a valid claim for breach because of the fact that he was called by subpoena to give evidence in the first place and so even though you would represent this as valid consideration to an extent given the fact that this was a forbearance in return for some money, it was a performance of an action in return of some money, the performance of the action was made statutorily obligated, statutorily obliged to do on the basis of the fact that there was a subpoena that provided him with the opportunity to come and give evidence. So if there was no subpoena then this could have been a successful claim but the fact that there was a subpoena suggests that there was a duty on the part of the claimant to actually come and do the performance of the action anyway so this cannot represent valid consideration. Another case which takes place in 1809 is the case of Stilke and Myrick. Now this case there were a number of sailors who had been contracted to crew a ship from London to the Baltic seas and then to return back to London. Now the conditions were particularly harsh and two of the eleven would actually desert their posts along the journey, the rest would refuse to work until they were promised to have higher wages. They continued their work when these wages were promised by the captain, when they got back to London the captain basically stiffed them and said we're refusing to pay those higher wages. The result was that the crew suggested that this was a contract that the captain had then been in breach of. All of their claims would fail given the fact that they had already been contracted to sail the ship from London to the Baltic and back. An additional promise could not be enforceable therefore the additional promise of having higher wages because there was not an addition of consideration they were already contracted to do this to do this voyage and so even though the conditions were particularly harsh and they were probably more than they expected them to be it still didn't mean that this was a representative of new consideration. We're going to get to another case in the future where a very similar thing happens in terms of the requesting of higher wages that actually is successful but the distinct distinction here between this case and the case that we'll look at in the future in a couple of lessons time represents is representative by the fact that there were a significant number more desertees in the next case which actually did mean that the job was significantly different compared to in this case where two of the 11 being deserting from their posts did not represent new consideration.