Contract Law

Consideration:
•    Number of plausible ways to look at the different types of agreements that the law will enforce
o    In common law, we enforce almost none of these
o    Consideration:  The type of promises that we enforce end up coinciding with what would be looked at if we said we would enforce “serious promises”, etc.
•    Requires evidence of an exchange.  If an exchange occurs, it ought to be fairly conspicuous.
•    Has an elemet of formality.
•    Although it is at first glance eccentric and non-intuitive, it does largely yield the same approach as if we had taken a more intuitive approach.
•    Analytical vocabulary for consideration as a problem:
o    Must approach the problem in a certain way.
•    Who is the offerer, who is the offeree?
•    Analytical tools involved the vocab of promiser and promisee – not the equivalent of offerer and offeree, in any way shape or form.
•    They are incommensurate ideas.
•    At the formation of a contract, we can conceptualize the formation of a contract as an exchange of promises.
•    If each party is receipt of a promise from the other, then we have two promisers and two promisees
•    This is the formation perspective.
•    But by the time time has passed and we have entered litigation, only one of the orginally dual promiser/promisee relationships is relevant.
•    One promisee sues one promiser.  This is the promise that the promisee must show that they gave consideration in exchange for.
•    This is the promise that has allegdedly been broken.
•    This tells us what the relevant consideration was.
•    Must show the court that the relevant consideration was giving.
•    In a contracts case, the plaintiff is always the promisee; the defendant is always the promisor.
•    The relevant consideration is the one that the promisee must show that he provided to the promisor in exchange for his promise.
o    Our legal system only enforces bargains.
o    In our legal system, a promise of consideration is as good as consideration – this explains how offer/aceptance can result in a binding contract.  The law says that a promise of title (for example), in exchange for money (for example), is equivalent to having made the exchange.
o    There is virtually no reason, but the alleged reason is that the promise is as good as consideration, because the alternative fulfilling the promise is to be sued (and have the court impose payment).
•    Great conclusion:  The relevant consideration is the one that the pl. promisee must show that he/she promised to exchange with the def. promisor in exhange for the defendant’s promise.
•    Dalhousie – one cannot look at just anything and decide that it’s consideration.  Dal built buildings and hired teachers (in theory) on the basis of this pledge, and yet it was not consideration.
•    The point made by the scc is that Dal did not bargain the building of buildings.  It received Arthur’s promise, and then built buildings in response.  It did not exchange the building of buildings for the promise.
•    Cannot be made in reaction to a promise – that is not consideration.  “Here’s a plane ticket.”  “Wow.  Thanks.  I’ll give you some money.”  This is not consideration.  It is a reaction.
o    The essence of consideration is that it won’t be such unless it was exhanged in return for the promise.
•    P 357:  “To hold otherwise would be to hold that a naked, voluntary promise may be converted into a binding legal contract by the subsequent action of the promisee alone, without the consent, express or implied, of the promisor.”

Hamer v. Sidway
•    Is a case where one might at first thing that there was not consideration, but yes indeed there was.
•    The “assignee” in this case – a right is a species of property.  The nephew has sold his $5000 claim to some money-lender (likely for a much lesser value).
•    Family promises – not addressed, though this was between family, and at a family gathering where they had no doubt been drinking…
•    The facts of the case is not contested.
•    What is contested is the existence of consideration on the nephew’s part.
•    Uncle’s estate argues that he didn’t receive any benefit, but in actuality the nephew benefitted.
•    The law does not recognize “moral consideration” – could not argue that the uncle received the pleasure of seeing his nephew do well.
•    It is enough that the nephew gave up his legal rights based on the promise of his uncle.  This is enough of a basis to constitute consideration.
o    Consideration does not have to be a benefit traded to the promiser – it can be simply a detriment, loss, or responsibility given, suffered, or undertaken by the other (p 258).
o    Can shorten the benefit concurred / detriment sustained formulation to simply detriment sustained.
•    There is not case where the defendant promisee did not sustain a detriment.  All benefit conferred cases are also detriment sustained.
•    In typical contracts case, what one gives up with typically benefit the other.  However, this is not a universal rule.
•    Can take a formula in currie v. Misa and collapse it into “detriment sustained”
o    This is broader.
•    P 261 is a little more concise.  It is, however, useful to take it to the next level.

Eastwood v. Kenyon
•    A case of the guardian versus the husband.
•    Sarah Eastwood left orphaned.  Guardian borrowed money to spend on her upkeep during her infancy.
•    At 21, Sarah got married.  First promised to compensate her guardian.
•    New husband then made the same promise.  Does not complete this promise
•    Must identify the promise being sued on.
o    The relevant consideration is the one that the the guardian bargained to the husband.
o    Only thing that the guardian could say is that he took care of Sarah during her infancy.
o    Could not have actually been made in consideration of the husband’s promise, as it pre-dated the promise by many years.
o    The thing which is consideration was sustained long before the promise being sued on.  Was already in the past.  Could not have been an exchange or bargain as the law demands.  The guardian is remedyless.

For tomorrow:  will return to Eastwood v. Kenyon – will do entire next section of outline. – 3 cases..