CONTRACT LAW 1.

KOMUHENDO PHIONA.

COURSE WORK: LAW OF CONTRACT 2010

QNT: With the use of relevant case law, examine the importance of consideration in contract

law.

A contract is a legally binding agreement between two or more people. in a Contract Act is

a promise enforceable by law and it requires the mutual asset of two or more persons where by

one of them ordinarily making an offer and another accepting.

it is also defined as a legally binding agreement that defines and governs the rights and duties

between or among its parties under section 10 of the Contract Act.

According to the case of law contract is defined as an agreement made with the free

consent of parties with capacity to contract for a lawful consideration and with a lawful object

with the intention to be legally bound under section 10of the Contract Act forexample in the case

of Ssempa v Kambagambire 2017 where the plaintiff who was Harry Ssempa and the defendant

who was Kambagambire David made a contract before the plaintiff bought land which was

comprised in Singo block 485 plot 11, they therefore agreed that the defendant was to pay a

penalty of UG 2000000 per month until the out standing loan paid in full and made a contract

over that.

the sources of contract include; offer which refers to the promise that one part makes in

exchange for another parties performance. Acceptance which refers to the promise or act of a

buyer who indicates hes or her willingness to be bound by the terms and conditions stipulates in
a sellers offer. Others include; consensus which refers to the terms of the proposed contract to be

reasonably specific, alternatively or reasonably as ascertainable by means of principle of

determination among others.

the Contract has also got the source of consideration which means the act or a promise

offered by one party and accepted by the other party as a price for that other promise.

therefore consideration is a price for which the promise of the other is bought and the

promise thus given for value is enforceable under section 2 of the Contract Act.

justice Patterson also defined consinderation as something which is of some value in

the eyes of the law, therefore it might be of benefit to the plaintiff or detriment to the defendant.

Also the of Currie v Misa 1875 defines consideration as a right, interest, profit or

benefit plus detriment as well as forbearance.

Consideration is illustrated under the case of Collins v Godefroy 1831 where Godefroy

promised to pay Collins if Collins would attend court and give evidence for Godefroy. Collins

had been served with subpoena . Collins sued for payment, it was held that as Collins was under

a legal duty to attend court he had not provided consideration, His action therefore failed.

It is also illustrated under the case of Glassbrooke v GCC 1925 where the police wer

under a duty to protect a coal mine during a strike and proposed mobile units. The mine owner

promised to pay for police to be stationed on the premises. The police complied with this request

but when they claimed the money, the mine owner refused to pay saying that the police had

simply carried out their public duty. it was held that though the police were bound to provide

protection , they had a discretion as to the form it should take.. As they believed mobile police
were sufficient, they had acted over their normal duties. The extra protection was good

consideration for the promise by the mine owner to pay for it and so the police were entitled to

payment.

Price v Easton 1833 also illustrates consideration where Easton made a contract with X

that in return for X doing work for him, Easton would pay price 19dollars. X did the work but

Easton did not pay, so price sued. It was held that prices claim must fail, as he had not provided

consideration.

Anything of value promised by one party to the other when making a contract can be

treated as consideration.

Consideration works in hand with agreement. Therefore, an agreement is a promise between two

entities creating mutual obligations by law under section 19 (2) of the Contract Act. The basic

elements required for the agreement to be a legally enforceable contract are; mutual asset,

expressed by a valid offer and acceptance, adequate consideration, capacity and legality. In some

states, elements of consideration can be satisfied by a valid substitute.

Agreement is illustrated in the case of Ssempa v Kambagambire 2017 were they all

agreed upon each other where they made a sales agreement when Ssempa was going to buy land

from the defendant who was Kambagambire David.

A valid agreement is an agreement which is binding and enforceable. In a valid contract,

all the parties are legally bound to perform the contract under section 10 of the Contract Act
enumerates the points of essentials for a valid contract.

Every promise and all set of promises, forming the consideration for each other is an

agreement. When a person to whom the proposal is made defines his asset, the proposal is said to

be accepted. An agreement is therefore valid when one party makes a proposal or offer to the

other party signifies his asset. An agreement to be required a valid one it has to be between two

persons, it is required to be between an offeror and of free, who accepts the offers becomes an

acceptor. Both these parties should be different persons as one can not enter into an agreement

with himself.

Also both the offeror and offeree in the same sense and at the same time should understand the

agreement.

There are types of consideration in law of contract and they include; executed and

executory consideration. In India also past consideration is included unless in Uganda. Executed

consideration is the consideration which has been provided by the party promising it for example

money which has been promised to be paid under a contract which has been paid forexample you

go to the Dobi and ask him to wash for you clothes and you pay for his services in advance then

we call the payment executed consideration for the Dobi’s promise to wash for you.

While executory consideration is a consideration which has been promised but not yet

performed to the other party. It maybe a product yet to be delivered or it could be money to be

paid which has not been paid.

Executed consideration is illustrated under the case of Carlil v Carbolic smoke ball

company 1892 where the Carbolic smoke ball company made a product called smoke ball which

was said that it heals the flu pandemic which was estimated to have killed over one million
people, there fore it advertised that it would pay 100 dollars to anyone who got sick with

influenza after using their product following the instructions and Carli responded to their

advertisement hence she executed, which means that she performed the promise.

Executory consideration is also illustrated under the case of Chapple v Nestle 1959

where Nestle were running a special offer whereby members of the public could obtain a music

record by sending off three wrappers from Nestles chocolate bars plus some money. The

copyright to the records was owned by Chapple who claimed that there had been branches of

their copyright therefore the case turned round. It is also illustrated in the case of Collins v

Godefroy 1831 where Godefroy promised to pay Collins if at all Collins would attend court and

give evidence for Godefroy.

In consideration, each party must make a promise, perform enact or forbear. Each

party’s promise, act, or forbearance must be in exchange for a return promise, act or forbearance

by the other party.

Past consideration is not a consideration because consideration must be supplied in

the present or in the future but things done beforehand can not be good consideration but in India

it is actually a valid consideration.

Consideration has got rules and they include the following;

1. The consideration must move from the promisee to the promiser: This means that a person to

whom a promise is made can only enforce the promise if they have provided consideration for

it.It must move from the promisee because if a person other than the promisee is to provide the

consideration, the promisee can not enforce the agreement. This rule is illustrated under the case

of Tweddle v Atkins 1861 where Tweddle and William Guy agreed in the writing to pay sums of
 money to Tweddle’s son William who was engaged to Miss Guy but unfortunately died before

payment and when the state would not pay, William Tweddle then sued Mr. Atkinson who was

the executor of Guy’s estate for the promise of 200 dollars he had promised him.

2. Consideration must not be past: It must be executed, or executory but not past, therefore it must

be supplied in the present or future but not things done beforehand. It is illustrated under the case

of Re McArdle1951 where a wife and her three children lived in a house and when one of the

children got married, the wife decorated the house and the three children promised to pay her but

later didn’t. It was held that the document they had signed was enforceable because the work was

done before therefore it was past consideration.

3. It must be sufficient but not be adequate.Consideration must be having some values whether it

appropriates in order to meet the return of the aggreement. It is illustrated under the case of

Chappell v Nestle 1959 where Chappell and company owned a copyright of shoes and while

Nestle was giving away recordsof it to people who sent in three wrappers from 6d chocolate bars

and Nestle said 1s 6d was the ordinary retail selling price, but Chappell and company argued that

it should be more .

4. Forbearance to sue. The parties to a contract must have an intention that there relations be

regulated by the law and where such intention is present then the contract will be actionable in

court in the event of a breach by either of the parties. It is illustrated under the case of Alliance

bank v Broom 1864 where Broom owed the bank money in an unsecured loan and then the bank

asked for some security which Broom promised to provide but didn’t, then the bank proceeded to

enforce the debt with him but he argued that the bank had provided no consideration for his

promise to provide security therefore claim was allowed. An existing contractual duty will not

amount to valid consideration is an exception to forbearance to sue where the performance of an

existing contractual duty owed to the promisor is not good consideration for a fresh promise

given by the promisor.

gross revenue payable under such contract over the term of such .contract. It is illustrated under

the case of White v Bluett 1853 where Mr. Bluett had lent his son some money and the father

later died before paying him, Mr. Bluett’s executor sued his son to payback the money but the son

said that the father had told him not to pay it. It was held that there was no consideration for any

discharge of the obligation to repay and the son had no right to complain, therefore the son not

complaining was an intangible benefit.

Consideration has got importances in contract law and they include the following;

 Consideration helps in the prevention of the promisors in reaching the promisees

expense, for example the exception of past consideration rule; Although past

consideration is not good consideration, there are exceptions to this rule as sometimes the

exact order of event is not decisive if the court is satisfied that the promisers promise and

the promises past actions are in fact part of the over all transactions

 Its an essential element of a valid contract since it is agreed upon exchange of something

value in eyes of the law.

 The doctrine of the consideration is able to protect the promisees reliance. for example;

forbearing to sue, no matter how small the act can constitute the consideration, if the

party fulfills her duties or not, it is referred to as valid.

In conclusion, in consideration, each party must make a promise, perform

an act or forbear and each party’s promise, act, or forbearance must be in exchange for a

return promise among others.

BOOKS OF REFERANCE:

LAW OF CONTRACT

ATIYAH(essays in contract oxford 1986)

BRITANNICA.