l Occurs when a counter-offer is made (Hyde v Wrench). l Rejections are not effective until communicated to the offeror.
Lapse of time
l An offer will lapse after the passage of a reasonable amount of time (Ramsgate
Victoria Hotel Co. Ltd v Montefiore).
Death
l The deceased’s representative should be able to accept/reject or enforce a contract that
is not for the deceased’s personal service.
l A contract for personal services will terminate automatically on the offeror’s death.
Certainty of terms
FURTHER READING
Visit www.mylawchamber.co.uk/richards to access exam-style questions with answer guidance, multiple-choice quizzes, live weblinks, an online glossary, and regular updates to the law.
Use Case Navigator to read in full some of the key cases referenced in this chapter:
Brinkibon Ltd v Stahag Stahl und Stahlwarenhandelsgesellschaft GmbH
[1982] 1 All ER 293
Butler Machine Tool Co. Ltd v Ex-Cell-O Corpn (England) Ltd
[1979] 1 All ER 965
Byrne & Co. v Leon Van Tienhoven & Co. (1880) 5 CPD 344 Carlill v Carbolic Smoke Ball Co. [1893] 1 QB 256
Entores Ltd v Miles Far East Corpn [1955] 2 QB 327 Gibson v Manchester City Council [1978] 1 WLR 520 Henthorn v Fraser [1892] 2 Ch 27
Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd [1989] QB 433 Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd [1953] 1 All ER 482
Further reading
Adams, ‘The Battle of the Forms’ (1979) 95 Law Quarterly Review 481
Adams and Broadsword, ‘More in Expectation than Hope: The Blackpool Airport Case’ (1991) 54 Modern Law Review 281
Austen-Baker, ‘Offeree Silence and Contractual Agreement’ (2006) Common Law World Review 354 (247)
Beale, Bishop and Furmston, Contract – Cases and Materials, 4th edn (Butterworths, 2001) Beatson, Anson’s Law of Contract, 28th edn (Oxford University Press, 2002)
Evans, ‘The Anglo-American Mailing Rule: Some Problems of Offer and Acceptance in Con- tracts by Correspondence’ (1966) 15 International and Comparative Law Quarterly 553 Fried, Contract as Promise: A Theory of Contractual Obligations (Harvard University Press, 1981) Furmston, Cheshire, Fifoot and Furmston’s Law of Contract, 15th edn (Oxford University Press,
2006)
Gower, ‘Auction Sales of Goods Without Reserve’ (1952) 68 Law Quarterly Review 457
MacQueen and Azim-Khan, ‘The Argos Free TV Debacle: Two Legal Opinions’ (1999) 1 Electronic
Business Law 9
Mitchell and Phillips, ‘The Contractual Nexus: Is Reliance Essential?’ (2002) 22 Oxford Journal
of Legal Studies 115
Stone, ‘Forming a Contract without Offer and Acceptance’ [1994] Student Law Review 12, Spring Stone, ‘The Postal Rule in the Electronic Age’ [1992] Student Law Review 15, Spring
Treitel, The Law of Contract, 11th edn (Sweet & Maxwell, 2003)
Vorster, ‘A Comment on the Meaning of Objectivity in Contract’ (1987) 103 Law Quarterly Review 274
3
Consideration
Introduction
Consideration is one of the principal ingredients of an enforceable simple contract in English law. It was not always such a requirement and it is largely regarded as having originated in the sixteenth century, though the technical reasons for its evolution are not clear. One theory is that it evolved as a means of restricting the development of assumpsit, in that only promises supported by consideration could be enforced; gratuitous promises were, therefore, not enforceable. The law thus evolved in simple contracts in such a way as to enforce bargains rather than promises. The concept of specialty contractsevolved separately from assumpsit at a time when the law was very much more formulary in its approach. In this situation an agreement made under seal could be enforced despite the lack of consideration.
The difference between a simple contract and a specialty contract may be illustrated by reference to gifts. As we will see, consideration broadly means a quid pro quo on the part of the participants to the contract, a reciprocal giving and taking by both parties or ‘something for something’. In the case of a promise by A to give B £10, this is clearly a bare gift, a nudum pactum, and as such is unenforceable as a simple contract since there is clearly no reciprocity between the parties. If this gift is embodied, however, in a deed, a deed being a document made under seal, then such an agreement is enforceable as a specialty contract.
In this chapter we are thus considering what, in law, amounts to consideration that will support a simple contract. Before we approach this task three further points need to be made. First, the question as to what constitutes consideration has to be addressed to each party’s promise in relation to the contract, as each party must provide this element to enforce the contract. In other words, the validity or otherwise of consideration is assessed in relation not to the contract as a whole but to its provision by an individual participant to the contract. Second, although textbook writers often refer to this area as the doctrine of consideration, and while this might originally have been true, it is erroneous to think of it as a single concept today. Consideration has evolved into a body of rules developed by the courts in order to place limitations on the enforceability of the contracts that come before them. Third, an agreement in which consideration is lacking is not necessarily unenforceable, as we shall see in our analysis of promissory estoppel later in this chapter. Here the courts will, in certain circumstances, enforce a contract
For more on promissory estoppel refer to page 74.
CHAPTER 3 CONSIDERATION
even though there is a lack of consideration. Similarly the courts will on occasion return a finding of no contract despite the apparent existence of consideration, the basis for such a decision being that only certain types of consideration are recognised by the law. While the notion of consideration is concerned with a giving of value by both parties, only ‘something of value in the eyes of the law’ is regarded as amounting to consideration.