What Is Consideration?

Consideration is one of the three essential requirements for a binding contract in English law, alongside offer and acceptance and intention to create legal relations. Without consideration, a promise is a gift — gratuitous and unenforceable in law.

Consideration is a fundamental topic on CAIE A-Level Law (9084) Paper 3 (contract law) and one of the most technically demanding areas for students in Pakistan, Bangladesh, India, Malaysia, and Sri Lanka. The rules — particularly past consideration, the existing duty rule, and Williams v Roffey Bros — require precise understanding and careful application to score in the higher bands of the CAIE mark scheme.

The classic definition comes from Currie v Misa (1875): consideration is ‘some right, interest, profit or benefit accruing to one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other.’ More simply, consideration is the price paid for a promise — what each party gives in exchange for the other’s promise.

The Rules of Consideration

Consideration must move from the promisee: only a party who has provided consideration can enforce a contract. A third party who has not provided consideration has no right to sue on the contract (Tweddle v Atkinson [1861]) — a principle now supplemented by the Contracts (Rights of Third Parties) Act 1999.

Consideration need not be adequate but must be sufficient. Courts will not assess whether the bargain was commercially fair — a peppercorn can be good consideration (Chappell & Co v Nestlé [1960]). However, consideration must have some legal value — it must be something the law recognises as value.

Past consideration is no consideration. An act done before a promise is made cannot constitute consideration for that promise, because there is no exchange — the act was not done in return for the promise (Roscorla v Thomas [1842]). The exception is where the parties understood at the time of the act that payment would follow (Lampleigh v Brathwait [1615]).

Key Cases on the Rules of Consideration

Thomas v Thomas [1842] — A widow was allowed to stay in her late husband’s house in return for £1 per year and keeping it in repair. The £1 was sufficient consideration even if it was not adequate — courts do not question commercial value.

Chappell & Co v Nestlé [1960] — Chocolate bar wrappers (which Nestlé threw away) were held to be part of the consideration for a record. Even something of minimal value can be good consideration if the parties treat it as part of the bargain.

Roscorla v Thomas [1842] — Promise that a horse was sound in health and free from vice was made after the sale. Past consideration: the sale was complete before the promise — no enforceable warranty.

Re McArdle [1951] — Work carried out on a house before a promise to pay was held to be past consideration. The promise made after the work was complete was unenforceable.

Performance of an Existing Duty: Williams v Roffey Bros

A longstanding rule holds that performance of an existing contractual duty cannot constitute consideration for a new promise. If you are already obliged to do something, promising to do it again adds nothing of value.

However, this rule was significantly modified by Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991]. A carpenter (Williams) contracted to do joinery work on a block of flats. He ran into financial difficulties. The main contractor (Roffey) promised extra payment to ensure the work was completed on time, as they would incur a penalty under the main contract if it was not. Williams completed the work but Roffey refused to pay the extra sum.

The Court of Appeal held that where a promisor obtains a practical benefit from the promise to pay more — and there is no duress — that practical benefit can constitute good consideration. Roffey’s benefit was the avoidance of the penalty clause and the assurance of timely completion. This decision remains controversial as it appears to undermine the existing duty rule.

Part Payment of a Debt and Promissory Estoppel

The rule in Pinnel’s Case (1602), confirmed in Foakes v Beer [1884], states that payment of a lesser sum cannot be satisfaction for the whole debt — a creditor who accepts part payment can still sue for the balance. This rule has been criticised as commercially unrealistic.

Promissory estoppel is an equitable doctrine that can prevent a party from going back on a clear and unambiguous promise not to enforce their strict legal rights, where the other party has relied on that promise. Established in Central London Property Trust v High Trees House Ltd [1947] by Lord Denning, promissory estoppel is a shield not a sword — it can be used to defend a claim but cannot found an independent cause of action. It is also suspensory, not extinctive: the promisor can generally resume their strict rights on giving notice.

Exam Technique: Consideration Questions

For problem questions, work through each rule systematically: (1) Has consideration moved from the promisee? (2) Is the consideration sufficient (legally recognised value), even if not adequate? (3) Is the consideration past? (4) Is the defendant claiming to enforce performance of an existing duty — apply Williams v Roffey if a practical benefit exists. (5) Is there a debt and a part payment — consider Foakes v Beer and whether promissory estoppel applies.

For essay questions, the most fertile evaluative area is Williams v Roffey: does it undermine the certainty of the existing duty rule? Is practical benefit a workable concept? Should promissory estoppel be extended to found a cause of action? These are live debates in English contract law.

Consideration in CAIE Contract Law: Common Errors by Asian Students

CAIE examiner reports on contract law consistently identify consideration as an area where students lose marks through imprecise application. The most common errors among students in Asian examination centres are: treating past consideration as valid without identifying the Lampleigh v Brathwait exception; applying Williams v Roffey too broadly without checking for the practical benefit and absence of duress conditions; and confusing promissory estoppel with a cause of action rather than a defence.

A further challenge is the relationship between Foakes v Beer and promissory estoppel. Many students assert that a creditor who accepts part payment is bound by promissory estoppel without establishing that the debtor actually relied on the promise to their detriment. The reliance element is essential — and frequently omitted in examination answers across Asian centres.

For students in Pakistan, Bangladesh, India, Malaysia, and Sri Lanka studying contract law without access to specialist teaching, recorded lectures that work through the rules of consideration in sequence — with clear explanation of the exceptions and the Williams v Roffey controversy — provide the structured foundation needed to answer CAIE consideration questions at Band 4 and Band 5 level.

Frequently Asked Questions

What is the definition of consideration in English law?

From Currie v Misa (1875), consideration is a right, interest, profit or benefit accruing to one party, or a forbearance, detriment, loss or responsibility given, suffered or undertaken by the other. In short, it is the price paid for a promise.

What is past consideration and why is it problematic?

Past consideration is an act done before a promise is made. It cannot constitute consideration for the later promise because there is no exchange — the act was not done in return for the promise. Past consideration is no consideration (Roscorla v Thomas [1842]).

What did Williams v Roffey Bros decide?

Williams v Roffey Bros [1991] held that where a party obtains a practical benefit from promising to pay more for performance of an existing contractual duty (and there is no duress), that practical benefit can constitute good consideration for the new promise.

What is promissory estoppel?

Promissory estoppel is an equitable doctrine that prevents a party from going back on a clear promise not to enforce their strict legal rights where the other party has relied on that promise. Established in High Trees [1947], it operates as a shield (defence) not a sword (cause of action).

Does consideration need to be of equal value to what is promised?

No. Consideration must be sufficient (legally recognised) but need not be adequate (commercially equal). Courts do not assess the fairness of a bargain — a peppercorn can be good consideration (Chappell v Nestlé [1960]).

Key Takeaways

• Consideration = the price of a promise; essential for a binding contract.
• Must move from the promisee — third parties without consideration cannot sue.
• Must be sufficient (legal value) but need not be adequate (commercially fair).
• Past consideration is no consideration — exception: where payment was always implied (Lampleigh v Brathwait).
• Existing duty rule: performing what you’re already obliged to do is no consideration — but practical benefit may suffice (Williams v Roffey [1991]).
• Part payment cannot satisfy a whole debt (Foakes v Beer [1884]).
• Promissory estoppel: shield not sword; suspensory not extinctive (High Trees [1947]).

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