Doctrine Of Consideration Research Articles

The Indian Contract Act — background and case law

This article aims to illustrate the background and the case law of the Indian Contract Act, enacted in 1872. It also tries to provide a comparison between the law introduced in India and the model which is the English Common Law of Contract based on the English law of the time. Indeed, the provisions contained in the Indian Contract Act are more advanced and more organically conceived than the English Common Law of Contract. Pillars of the Common Law of Contract such as the doctrine of consideration, the doctrine of frustration and the doctrine of economic duress are found in the Indian act in an improved version. Indian courts applied them consistently in the majority of cases. Even today, in a few exceptional cases, the Indian courts appear to be influenced by English case law to such an extent that they do not comply with the innovative aspects of the Indian Contract Act. Recently the pandemic of Covid-19 causing hindrance to the performance of many contracts raised questions such as the existence of force majeure able to nullify the contract and in certain cases it triggered the applicability of the doctrine of frustration. Such situations are codified by the Indian Contract Act and case law is available. New needs have arisen in the field of marriage law such as prenuptial agreements, which may apparently be deemed valid if they pass the test of public order as stated in the Indian Contract Act.

Sperm and Eggs in Consideration of Money: A Pound of Flesh for Three Thousand Ducats?

Donor conception is a practice in which a donor sperm or egg (or both) is used to conceive a child. Usually, the donor sperm or egg is procured in a financial transaction: gametes exchanging hands for money. The “donor” in donor conception is a bit of an oxymoron, for a donation it is not when money—and sometimes big money—is a feature of the practice, not a bug. This Article will show that donor conception is not proper to who human beings are given their nature as embodied beings, with particular attention to the children of donor conception and to the donors. The bargained-for exchange of sperm and eggs for money also does not satisfy the requirement of commutative justice, historically understood to be of paramount importance in the doctrine of consideration in contract law. Further, the aspects of both the embodied nature of the person and the impropriety of trading on the body present in donor conception are considered in light of William Shakespeare’s play The Merchant of Venice. This Article concludes that donor conception, being unjust and not oriented to human flourishing, ought not to be done. A re-orientation of the law toward aproper respect for each person’s embodied nature and toward fostering a posture of gratitude in receiving each child as a gift would be welcome.

The doctrine of consideration in english contract law and related legal constructions in the law of countries of the romano-german legal family

Introduction. The article is devoted to the doctrine of consideration in Anglo-American law and similar legal constructions in the law of the countries of the Romano-Germanic legal family. On the basis of foreign studies of the doctrine of consideration, the author finds out the legal nature of this doctrine in contract law. Attention is focused on the fact that consideration is associated with the categories of interest, good, benefit, benefit, loss. It is indicated that consideration is an essential condition for the validity of any contract, including an informal one. An attempt is made to compare the doctrine of consideration with the concept of cause of transaction in the RomanoGermanic legal family, which was developed due to the reception of Roman law. Summary of the main research results. Reasonable causes as promises to carry out an exchange of certain goods brings this concept closer to the doctrine of consideration. However, the ambiguity of the term “causa” in the sources of Roman law (motive, purpose, result, basis) makes it impossible to find the origins of the doctrine of consideration in the Roman concepts of causa, as indicated in the article. The modern understanding of the cause of action as the goal that the parties seek to achieve when entering into a contract is also different from the doctrine of consideration. The author emphasizes that the Civil Code of Ukraine contains neither the doctrine of consideration nor the concept of cause. On the other hand, in the civil law of Ukraine, the category of counter is manifested in the concepts: "counter performance", "counter obligations", "counter claims". It is emphasized that Article 538 of the Civil Code of Ukraine "Reciprocal performance of an obligation" also cannot be considered an analogue of the doctrine of counter-provision, since the right to refuse to perform a counter-obligation established in this article is applied precisely at the stage of performance of the contract to obligations that are interdependent Conclusions. The author made a conclusion about the possibility and usefulness of the reception of the counterproviding doctrine and its application in national judicial practice.

Varying Contracts – Consideration, Form and Reality

In Ma Hongjin v SCP Holdings Pte Ltd, the Singapore Court of Appeal confirmed that only contract variations supported by consideration are legally binding, rejecting the suggestion that the acceptance of practical benefits has so diluted the doctrine of consideration as to render the requirement illusory. Subsequently, in Charles Lim Teng Siang v Hong Choon Hau, the Singapore Court of Appeal declined to follow the UK Supreme Court's reasoning in MWB Business Exchange Centres Ltd v Rock Advertising Ltd, holding (obiter) that no oral modification clauses do not inevitably invalidate subsequent oral modifications. This note evaluates both decisions and concludes that their combined effect is to endorse a flexible framework for contractual variations in Singapore. The framework builds on the conception of contractual variations as a complex phenomenon encompassing both one‐off exchanges for value and cooperative adjustments to ongoing contracts. Nevertheless, its dominant focus is to promote enterprise through the enhancement of party autonomy.

Obligations, consent and contracts in Scots law: re-analysing the basis of medical malpractice liability in light ofMontgomery v Lanarkshire Health Board

AbstractProfessors MacQueen and Thomson have defined ‘contract’, within Scots law, as denoting ‘an agreement between two or more parties having the capacity to make it, in the form demanded by law, to perform, on one side or both, acts which are not trifling, indeterminate, impossible or illegal’. This definition reflects the fact that Scottish contracts are underpinned by consent, rather than by ‘consideration’. This, naturally, has the potential to be of great significance within the context of physician/patient relationships, particularly since the 2006 case ofDow v Tayside University Hospitals NHS Trustacknowledged that these relationships could be contractual in nature. This observation is of renewed importance since the landmark decision inMontgomery v Lanarkshire Health Board, which found that physicians must ensure that they obtain full and freely given ‘informed consent’ from their patients, prior to providing medical services. In light of the present medical regime which requires ‘doctor and patient [to] reach agreement on what should happen’, the basis of liability for medical negligence, in Scotland, requires reanalysis: ‘To have a contract only when the patient pays is not consistent with a legal system which has no doctrine of consideration in contract’.

¿Qué papel juega la consideration en la teoría del contrato de Thomas Hobbes?

La doctrina de la consideration como elemento de todo contrato en Thomas Hobbes no ha recibido suficiente atención por parte de los estudiosos, y los pocos que la han comentado han errado respecto de su función. En este artículo exponemos el papel que dicha noción juega en la teoría del contrato; en qué medida viene exigida o no por la antropología hobbesiana, y en qué medida es simplemente una importación del common law; cuáles tipos de consideration puede Hobbes aceptar, y nos referimos a la posibilidad de que al final de su vida Hobbes la haya reemplazado por la noción civilista de causa. Asimismo, analizamos cuál es la consideration en el contrato social.

Contract Variation and Changed Expectations

The much-maligned rule in Stilk v. Myrick, in which fresh consideration is required for a contract variation to be enforceable, is giving way across many common law jurisdictions. The purpose of this article is not to defend the doctrine of consideration from its critics, but rather to suggest that its replacement, the doctrine of economic duress, is a cure that is worse than the disease. The consideration requirement has been displaced without sufficient attention to the complementary role of promissory estoppel. By consequence, the flexibility advantages offered by equity may be circumscribed by an overly permissive view of contract variation. When both contract variations and suspensions are considered, the model of economic duress is found to be morally unpersuasive and economically inefficient. This article proposes that the modernization of the law of contract variation should be based on a model of changed expectations, wherein the parties’ expectation of performance can be varied by gratuitous promises, but these gratuitous promises are revocable with reasonable notice.

Testing the Boundaries of the Consideration Doctrine: Can You Contract to Buy and Sell a Ghost?

This article considers whether contracts to purchase ‘haunted’ objects are legally enforceable under Australian contract law. ‘Dybbuk boxes’, and related paraphernalia said to be possessed by spirits, are becoming increasingly popular on online shopping sites and as tourist attractions following recent high-profile incidents involving celebrities such as American rapper and record producer Post Malone. This article suggests that the enforceability of contracts for the sale of haunted items such as dybbuk boxes is dubious at best, and that the countless number of such contracts that have been concluded may be subject to legal challenge.

Testing the boundaries of the consideration doctrine: Can you contract to buy and sell a ghost?

This article considers whether contracts to purchase ‘haunted’ objects are legally enforceable under Australian contract law. ‘Dybbuk boxes’, and related paraphernalia said to be possessed by spirits, are becoming increasingly popular on online shopping sites and as tourist attractions following recent high-profile incidents involving celebrities such as American rapper and record producer Post Malone. This article suggests that the enforceability of contracts for the sale of haunted items such as dybbuk boxes is dubious at best, and that the countless number of such contracts that have been concluded may be subject to legal challenge.

Paid on Both Sides: Quid Pro Quo Exchange and the Doctrine of Consideration

I scratch your back, you scratch mine—how must these services relate in order to constitute a quid pro quo exchange? In the ordinary quid pro quo exchange, each party agrees to do their part in order to get the other party to do theirs; each conditions their own willingness to perform on the willingness of the other; and each regards the other as obligated to do their part in light of their agreement. But not all exchanges are ordinary, and a proper analysis is of considerable practical and theoretical significance. In the law alone, quid pro quo figures prominently in a wide range of contexts—civil as well as criminal, public as well as private—and lies at the core of a number of raging controversies concerning official corruption, insider trading, and other matters. This Article offers the first philosophical analysis of quid pro quo exchange in the Anglophone tradition. This analysis is framed by an investigation of the doctrine of consideration in contract, the site of the law’s most influential treatment of quid pro quo. The textbook definition of consideration relies on a conception of exchange - first elaborated by Oliver Wendell Holmes Jr. – that is couched in the motivational terms of reciprocal inducement. On this motivational conception, a quid pro quo is defined in terms of the instrumental motives that typically animate it, where each service is rendered as a means of bringing about the other. This Article argues against the motivational account of exchange and offers an original account in its place. This account takes as a starting point the traditional common law definition of exchange as reciprocal payment. On the account of exchange that emerges, two performances constitute a quid pro quo when the parties regard those performances as satisfying two conditions: first, that each performance satisfies the debt incurred by the other, and second, that after the sequence of performances neither party shall owe the other anything on account of the other’s performance. Together, these conditions imply that, in the wake of the performances, the parties will be “all paid up” as far as the performances are concerned. Finally, this Article offers an alternative consideration rule that incorporates its definition of reciprocal payment. This alternative rule locates the required element of bargain or exchange within the apparent terms of the agreement, and not in the motives—actual or apparent—that led the parties to assent to those terms. The reciprocal payment conception of consideration is superior to the textbook definition at the levels of both justification and fit, and sidesteps the problems that have made the doctrine an object of pillory in so many quarters.

Abolishing the Doctrine of Consideration - The Story of the Arra- Part 1

Abolishing the Doctrine of Consideration - The Story of the Arra- Part 1

Abolishing the Doctrine of Consideration - The Story of the Arra- Part 2

Abolishing the Doctrine of Consideration - The Story of the Arra- Part 2

Eclipsed by Orthodoxy: The Vanishing Point of Consideration and the Forgotten Ingenuity of the Indian Contract Act 1872

AbstractThe definition of consideration in Section 2(d) of the Indian Contract Act 1872 substantially anticipated the far-reaching reforms to the orthodox doctrine of consideration that were proposed by the English Law Revision Committee (1937). These included making enforceable, through the doctrine of promissory estoppel, promises without consideration in the traditional sense that were meant to and did induce reliance; making enforceable a promise to perform a pre-existing duty; and making binding a promise to keep an offer open. The pivots of the definition in Section 2(d) were: a ‘subjective’ conception of consideration on which value was to be measured by the desire of the contractors alone, as opposed to an external standard; a concomitant purging of the traditional requirements of benefit and detriment; and the recognition of induced reliance as a form of consideration. The definition was designed to mark the vanishing point of consideration without having to formally abolish it. This design, however, went awry as courts and scholars in India projected the orthodox English model of consideration, replete with benefit and detriment, and external standards of value, upon this provision. Consequently, an ingenious piece of draftsmanship came to be eclipsed by orthodoxy.

Promissory Estoppel and the Origins of Contract Law

Contrary to Samuel Williston’s description of the ALI’s formal restatement of contract law as merely presenting the law “as it is, not as a new law,” the doctrine of promissory estoppel set forth in Section 90 thereof does not represent an ancient principle of contract law. Rather, it constitutes a relatively recent and largely artificial innovation by Williston and his colleague Arthur Corbin. To overcome potential objections to such novelty, Williston and Corbin advocated for their new doctrine on the basis of specific claims of historical authority therefor. In particular, they asserted that promissory estoppel was doctrinally and philosophically consonant with the origins of English contract law during the Middle Ages. Those claims are not well-founded.Specifically, Williston, Corbin and other proponents of promissory estoppel have focused on the fact that during the period from roughly 1350 to 1600 litigants and courts incrementally turned for the enforcement of contract to the tort writ of trespass on the case sounding in assumpsit in substitution for the use of well-established, preexisting contractual writs. Yet these proponents of promissory estoppel have ignored the underlying reasons for, and limitations of, that historical development. Contrary to their implication, there occurred no fundamental doctrinal rejection of preexisting contract law, to which the doctrine of promissory estoppel would have been wholly alien. Rather, this circumvention of the preexisting contractual writs by means of assumpsit came to pass as the direct result of specific jurisdictional and procedural limitations that had hobbled the use of those contractual writs.Moreover, and critically, both prior to and during the period of this creative extension of assumpsit the fundamental principle of reciprocity in contract was repeatedly asserted by the courts and commentators. The major extension of assumpsit in the mid-1500s into the realm of the principal preexisting contractual writ for informal contracts, debt upon contract, was temporally coupled with and limited by this principle, which came to be expressed as the doctrine of consideration. Promissory estoppel, which rejects at its core the principle of reciprocity in contract, is antithetical to this history.

CONSTRUCTION GUARANTEES: FINALLY CLOSING THE DOOR ON EXTRANEOUS DEFENCES Coface South Africa Insurance Co Ltd v East London Own Haven t/a Own Haven Housing Association 2014 (2) SA 382 (SCA)

The issuing of performance bonds or construction guarantees in terms of a building contract may hold important consequences for the parties to a construction guarantee. Recently construction guarantees have received much attention from our courts and some of these cases even proceeding to the Supreme Court of Appeal. There may be various reasons for this sudden escalation in litigation with construction guarantees as the subject matter. One of the reasons may be due to numerous major construction projects that have been undertaken in the last few years in South Africa. Notable examples of these major construction projects include the building of stadia for the 2010 FIFA Soccer World Cup, the Gautrian Project, and the Gauteng Freeway Improvement Project. One of the aspects of construction guarantees that our courts has had to deal with was the nature of construction guarantees. The nature of construction guarantees is not only of academic interest but also has very important practical implications. Building, engineering and construction contracts such as the family of New Engineering Contracts and The Joint Building Contracts Committee agreements make provision for the employer or the party commissioning the construction works (“the works”’) to place a contractual obligation on the contractor to furnish a construction guarantee. Shortly after the award of the construction contract (“the underlying contract”), the contractor will instruct its insurer or banker to issue such a construction guarantee to the benefit of the employer. From the employer’s perspective, the construction guarantee serves a dual purpose: firstly, the willingness of a financial institution or insurer to issue such a construction guarantee is, to a degree, an indication of the contractor’s financial welfare. Secondly, in the event of the contractor's default, the construction guarantee enables the employer to gain immediateaccess to funds to properly complete the works in terms of the underlying contract. A contractual relationship is created by the construction guarantee between the employer and the issuer thereof. When properly drafted, a construction guarantee entitles an employer to demand payment from the issuer unconditionally upon the occurrence of a specific event. The liability of the issuer of the construction guarantee is subject only to the employer complying with the terms and conditions contained in the construction guarantee. Normally, the employer is required to issue a certificate in terms of which it is confirmed that the contractor is in default of the building contract or underlying contract and therefore the employer demands payment in terms of the construction guarantee. The main advantage that a construction guarantee offers to an employer is when enforcing the construction guarantee, the issuer thereof may not raise defences of an extraneous nature. This prevents protracted litigation over complex factual disputes. Fraud in such circumstances that makes it obvious is the only defence the issuer of a construction guarantee may raise to avoid liability under the construction guarantee. However, the Supreme Court of Appeal in Dormell Properties 282 CC v Renasa Insurance Co Ltd reopened again the possibility of raising extraneous defences. The Dormell judgment caused much uncertainty on whether extraneous defences may be raised to avoid liability in terms of a construction guarantee. The confusion regarding the true legal position was further exacerbated by the fact that in subsequent cases involving construction guarantees, the Supreme Court of Appeal chose not to overturn the Dormell case but rather to distinguish the facts of subsequent cases from Dormell. This case note therefore deals with the latest reported judgment on construction guarantees delivered by the Supreme Court of Appeal in Coface South Africa insurance Co Ltd v East London Own Haven t/a Own Haven Housing Association (2014 (2) SA 382 (SCA)). This case is of particular interest because the Supreme Court of Appeal unequivocally held that its judgment in Dormell was clearly wrong. This judgment has now once and for all put the question of whether or not extraneous defences may be raised in order to avoid liability under a construction guarantee to bed. The court also once again confirmed that the English doctrine of consideration does not form part of the South African law of contract.

RECENT DECISIONS OF ITALIAN COURTS ON INTEREST RATE SWAPS

RECENT DECISIONS OF ITALIAN COURTS ON INTEREST RATE SWAPS

Traditional Legal Principle Has Been Bent to Facilitate the Operation of Negotiable Instruments Such as Letter of Credit or Bill of Exchange: A Response to the Well-Known Myth

There is a saying that the traditional legal principles have been bent to facilitate the operations of the negotiable instruments such as bill of exchange or letter of credit. Most of the contenders are of the opinion that the instruments are completely contrary to the doctrine of consideration. They also believe that the principle of negotiability undermines traditional principles like ‘nemo dat quod non hebet’. The article has, with arguments and instances, made it clear that a payment obligation without the presence of consideration is not unprecedented. In this point the article has made a reference to the seal contract where consideration was never sought. Furthermore, it is well established that under the doctrine of estoppels a contract is valid even in the absence of consideration and customarily a contract without consideration is not invalid. On the other hand, it is proved that the principle of negotiability was not only exception to the doctrine of nemo dat principle. For example 'market overt' doctrine which was oppose to the nemo dat doctrine was well accepted and supported. Above all it has to be noted that the doctrine of negotiability has not come from the outside of the traditional legal principles rather it, itself, is one of the traditional principles and the concept of negotiability has been existed long before acceptance of nemo dat principle in common law.

Consideration and the Formation Defenses

The common law defenses to contract formation — duress, misrepresentation or fraud, mistake, and unconscionability — are best justified historically, doctrinally, logically, and from the standpoint of policy, as a response to the plaintiff’s showing of consideration. The next-best alternative, assent, justifies too little.This thesis is proved in two parts. Part I addresses doctrinal history. The defenses existed in the law long before assent became part of the doctrine. When the defenses developed, consideration was with promise the primary touchstone of contractual liability. The formation defenses were often formulated explicitly with reference to the doctrine of consideration, a facet of the defenses that continues in many statements of them today.Part II addresses logic and policy. Part II.A begins with a discussion of the policy grounds for the consideration doctrine and, incidentally, defends the doctrine. Part II.B shows the logical, doctrinal, and policy coincidence of consideration and the defenses. The defenses all show more than lack of assent, but they fully respond to, and coincide conceptually with, the plaintiff’s allegation of consideration.This Article is the second of two addressing the primacy of consideration and the resultant superfluity of assent doctrines in contract formation law. The first article, Assent Is Not an Element of Contract Formation, 61 U. Kan. L. Rev. 591 (2012), showed that assent as an element of formation merely duplicates a function already performed by the doctrine of consideration. One can have assent without consideration, but one cannot have consideration without assent. Because consideration is required, assent was and is already required as part of the consideration analysis. There is therefore no need for a separate element of assent. The first paper showed that the assent doctrines’ true function is merely to determine when consideration was given, when that time is legally relevant.This second article shows the doctrinal and conceptual primacy of consideration and resultant superfluity of assent doctrine with respect to the formation defenses. Commentators commonly suggest that the formation defenses exist because they undercut assent. I am not claiming that the defenses do not undercut assent. They do. A primary point of Assent Is Not an Element of Contract Formation is that consideration, as both a concept and a legal doctrine, includes assent. One cannot have consideration without assent. Inasmuch as duress and misrepresentation undercut assent, they also undercut consideration. But as the defenses are phrased and as they function in contract law, they undercut more than assent. Assent therefore does not occupy the field of the defenses; it does not exercise normative authority over them. It therefore does not justify them. Something other than assent shapes the defenses’ form and function. That something else is consideration.These conclusions combined with the historical, doctrinal, and logical arguments presented in Assent Is Not an Element of Contract Formation show that, of assent and consideration, consideration is elemental. Assent, on the other hand, is not elemental but is subordinate to and dependent on the consideration doctrine.

Intention to Create Legal Relations and the Reform of Contract Law: A Conservative Approach in the Modern Global Era

This paper is partially to refute the submissions by Gulati’s article recently published on Beijing Law Review which proposes abandoning the requirement of proving intention to create legal relations for the formation of an enforceable contract. After a critical analysis of the abandonists’ arguments, this paper argues that intention to create legal relations is the “marrow of contractual relationships” and the arguments for abandoning such a requirement because of the existence of consideration and/or offer and acceptance as test(s) of contractual enforceability is untenable and unconvincing. Consideration and/or offer and acceptance may be evidence of serious intention to be bound somehow but unnecessary intention to be bound legally. For a number of reasons, the doctrine of consideration is very unlikely to work any better than the intention to create legal relations test. If a test of contractual enforceability must be abandoned, that should be the doctrine of consideration rather than the intention to create legal relations. This paper compares the current positions of some common law jurisdictions, upholds the needs of stability, consistency, and the harmonisation of contract law in the modern global era, and proposes a conservative approach of contract law reform regarding the intention requirement and the related presumptions, that is, all common law jurisdictions should “go back” to the orthodox English position.

Contract as Assumption and Consideration Theory: A Reassessment of Williams v Roffey Bros

This article considers various aspects of the doctrine of consideration in the light of Professor Coote's recent book "Contract as Assumption". Whilst a voluntary assumption of a legal duty is the essence of a contractual obligation, not every promise given in exchange for another promise with the intention to create legal obligations becomes enforceable in contract. Thus there is no contract where A promises to give property to B and B promises to accept it. The Law discriminates between promises given for value and promises which are illusory or gratuitous. It does so by examining the content of the counter-promise (in the above example B's promise to accept) and requires that the performance of the obligation to be undertaken in the reciprocal promise confers a benefit on the promisor (in the example above A) or constitutes a detriment to the counter-party. It follows that whether a purported assumption of liability contained in a promise is enforceable is answered in our law by asking whether the promise is supported by consideration – for example whether what the counter-party has agreed to do is for the benefit of the promisor or to the detriment of the counter-party. It is also suggested that the concept of a practical benefit where an existing legal duty is sought to be modified has respectable historical antecedents which tend to support the reasoning in the controversial decision in Williams v Roffey Bros. Finally, Equity's traditional reluctance to enforce a covenant made under seal which is not exchanged for value is re-examined, and the significance of recent statutory reforms adverted to.