LawIn4: Consideration (Contracts)

Hi, you're listening to the Australian Law Student Law Info podcast. Your go to podcast for legal insights in 4 minutes or less. I'm Nick Hodgkinson and today we're talking about consideration. But first, our obligatory disclaimer. The law info is produced by law students. For law students it is not, nor is it intended to constitute legal advice. If you require legal assistance, you should contact your local Law Society who can direct you appropriately. For more information on the Australian Law student, visit our website at the Oz Law student.com OK Consideration. It's our second episode on contract law. Consideration is the lifeblood of contracts and encompasses of benefit, detriment, performance or forbearance, voluntarily incurred and ancillary to a promise without consideration. A promise becomes a mere nudim pactum and is devoid of legal force. However, you should note that consideration is not required if the promise is made under seal or deed right. Let's explore 2 approaches to understanding consideration. The benefit detriment approach understands that the premacy must either confer a benefit on the promise or or incur a legal detriment by surrendering or forgoing something. This concept is illustrated in Beaton and Mcdivitt, where consideration involves either a benefit accruing to one party or a detriment being suffered by another. The alternative approach is the quid pro quo bargain approach, where the bargaining promise must be made quid pro quo, with the ACT constituting acceptance. It's performed in reliance on a promise will give rise to an estoppel as demonstrated in Australian woollen mills, and Commonwealth courts will typically refrain from assessing the adequacy of consideration except where it is illusory. As seen in Woolworths and Kelly, past consideration given prior to a promise isn't good consideration. As established in Ross Scholar and Thomas, the existing legal duty rule often surfaces in contract modifications where fresh consideration is required to enforce a modified agreement, and you should refer here to Stillk and Marrick are, however, a handful of exceptions to this existing legal duty rule. For example, if fresh consideration is provided for the fresh promise, the modified agreement becomes enforceable to Hartley and Ponsonby 2nd. A practical benefit obtained by modifying a promise to pay more for the beneficiary's performance under the original contract will also constitute good consideration, as exemplified in Williams and Ruffy Bros and Nichols Contractors. Conversely, practical detriment incurred by modifying a promise to accept less than the beneficiary's original performance is also considered good consideration. As in Muzamichi and Winadel promises to third parties, bonafide compromises and part payment of a debt will all have their exceptions to the existing legal duty rule, and this showcases the nuanced nature of consideration in contract law. And there you have it, a comprehensive exploration of consideration in 4 minutes or less. Join us next time on the Australian Law, Student Law, and Four podcast. As always, if you have any suggestions, please e-mail us at team@theozlawstudent.com or leave a comment in your review on Spotify or Apple Podcasts.