Transcript
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
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team@theozlawstudent.com or
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