Contract Law: Principle of Past Consideration


Task: Explain the concept of past consideration.


Consideration is the sum of money provided in accordance with the promiser's demands in exchange for the commitment. If the parties had managed to reach a legally binding agreement, it would be more than adequate because in some jurisdictions, the sum paid for the promise wasn't an essential part of a contract. It is believed that the prior consideration was not reasonable. It should materialise either prior to or subsequent to the project. It wouldn't be regarded as good if the value that was agreed upon came before the pledge [1].

Since the only consideration for a promise was the performance of a stallion, the agreement in the 1842 case of Roscorla v. Thomas was not binding on the members. The special arrangement that was made prior to the guarantee was treated the same way. [2].

There have been many provisions that provide a respectable historical consideration. Which are:

The person making a commitment had asked for the fee to be provided.

The organisations value the payment for their work;

The act that would have been binding has been committed to, and is still being developed.

All of the aforementioned circumstances are present in the case [3]. In fact, the defendant insisted that the claimant own 60% of the stock, and the participants concurred that the action would be reimbursed by a guarantee at that time [4]. The prevalent premise was that it is not a reasonable consideration to address an existing contractual responsibility unless some additional advantage was supplied in cases where the requirement was already required by the promiser's arrangement. Even so, if a third party had been given the guarantee to fulfil the contract's obligation, the result would have been different. The fulfilment of that commitment was viewed as a reasonable previous consideration of the promiser's pledge in a case where a third party was due the binding commitment of the promise.

Additionally, it was stated in this instance [5] that just carrying out the task was not a reasonable consideration where a promise was legally required to do so. This aids in preventing corruption, such as the officer demanding ransom in exchange for doing duties that were already expected of them. However, the entity would be regarded as a positive factor [6] if it goes above and above the call of duty.

There are currently, however, two distinct exceptions to the price commitment paid, namely:

Statements of Prior Consideration for Screening

Where the principle of collateral estoppel is in effect. Since this principle is intended to enforce duties in specific circumstances where it would be unacceptable to do otherwise, it wasn't actually an option for the amount paid.