Consideration

• Pages: 34-45

DEFINITION AND NATURE OF THE DOCTRINE

The classic defi nition of consideration was given in Currie v Misa 1 by Lush J, who

said:

A valuable consideration, in the sense of the law, may consist either in some right,

interest profi t or benefi t accruing to the one party [the promisor], or some forebearance,

detriment, loss or responsibility given, suffered or undertaken by the other [the prom-

isee]. In short, consideration is either a benefi t to the promisor or a detriment to the

promisee or, in Pollock’s words, ‘the price for which the promise of the other is bought,

and the promise thus given for value is enforceable’.

2

Consideration is necessary for all contracts, except contracts made by deed under

seal. The essence of the requirement is that gratuitous promises cannot be enforced.

Thus, for example, if D promises to give $1,000 to C but subsequently changes his

mind, C has no cause of action against D for breach of contract, since C gave no

consideration for D’s promise; but if D’s promise to pay the $1,000 had been given in

return for C’s promise to look after D’s pets while D was away on holiday, then C

could succeed against D.

The nature and rationale of the doctrine of consideration are explained in Chitty

on Contracts 3 thus:

The basic feature of the doctrine is that ‘something of value in the eye of the law’ must

be given for a promise in order to make it enforceable as a contract. It follows that an

informal gratuitous promise does not amount to a contract. A person or body to whom

a promise of a gift is made from purely charitable or sentimental motives gives nothing

to the promisee, and the claims of such a promisee are regarded as less compelling

than those of a person who has provided (or promised) some return for the promise.

The invalidity of informal gratuitous promises of this kind can also be supported on

the ground that their enforcement could prejudice third parties such as creditors of the

promisor. Such promises, too, may be rashly made; and the requirements of executing a

deed or giving value provide at least some protection against this danger.

In the 2007 case of Collins v Air Jamaica Ltd , 4 C, who had been an employee of

the airline for over 20 years, was made redundant. The letter terminating

C’s employment set out his entitlements to severance pay and other benefi ts,

and continued: ‘Because of your years of service, a decision has been taken to

extend privilege travel benefi ts to you and your registered eligible dependants . . .

You will be entitled to a total of eight trips per annum on Air Jamaica’s services’,

at the reduced rate which he had enjoyed as an employee. The ownership of

the airline subsequently changed, and the travel benefi t was withdrawn. C sued

CHAPTER 4

CONSIDERATION

1 (1875) LR 10 Ex 153.

2 Principles of Contract , 13th edn, 1950, p 133.

3 28th edn, Vol 1, Ch 3.

4 (2007) Supreme Court, Jamaica, Claim No 1995 CLC 00203, unreported.