Jenkins LJ, delivering the judgment of the court, reasoned that the timing of the consideration is determinative. For a valid contract to be formed, there must be a mutual exchange such that the promisor's promise and the promisee's act of consideration stand in a relationship of reciprocity — each is given in return for the other. Where the alleged consideration consists entirely of acts already performed at the time the promise is made, that temporal relationship is absent. The consideration is not given in response to the promise; the promise is made in response to something already done.
The court emphasised that on the facts of the present case, all the improvements to the bungalow had been completed before the document was signed by the children. Mrs McArdle had expended the £488 and finished the work entirely of her own initiative before any discussion of reimbursement took place. The children's promise, therefore, came after and in response to work already done, not as an inducement or condition for the carrying out of that work.
The court applied the well-established authority of Roscorla v Thomas (1842) 3 QB 234, in which the Court of Queen's Bench held that a warranty given after the sale of a horse was not binding because the consideration for it — the purchase of the horse — had already passed. That case established with clarity that a promise made after an act is complete cannot be enforced on the basis of that act as consideration, since there is no nexus of exchange between them. The principle in Roscorla v Thomas was directly applicable to the facts of Re McArdle and compelled the same conclusion.
The court then turned to consider whether the prior request exception could rescue the executor's claim. Under this doctrine, which derives from Lampleigh v Brathwait (1615) Hob 105, past consideration may exceptionally be treated as sufficient where three conditions are satisfied: first, the act was done at the express or implied request of the promisor; second, it was understood by both parties that the act would be remunerated; and third, the subsequent promise can be construed as fixing the amount of that remuneration. Where these conditions are met, the law treats the request, the act, and the promise as forming a single continuous transaction, capable of supporting a binding obligation.
However, the court held that the prior request exception did not apply on the facts of Re McArdle. There was no evidence whatsoever that the improvements had been carried out at the request of the beneficiaries. The children had not asked Mrs McArdle to undertake the work, expressly or impliedly, and there had been no understanding at the time the work was done that payment would follow. The improvements were made entirely on the initiative of Mrs McArdle herself, without any prior communication with the beneficiaries about the matter.
In distinguishing Lampleigh v Brathwait (1615) Hob 105, the court observed that the exception requires the act to have been performed in response to a request — this is the essential factual foundation on which the doctrine rests. In Lampleigh v Brathwait, the claimant had ridden to obtain a royal pardon at the express request of the defendant, and the subsequent promise to pay was held enforceable because the entire sequence of events was united by the defendant's prior request. That feature was entirely absent in Re McArdle, making it impossible to invoke the exception.
The court also rejected any suggestion that the written document itself, by reason of its formal character, could cure the absence of consideration. The requirement of consideration is a substantive rule of contract law, not a merely procedural one. A written agreement that lacks valid consideration is no more enforceable than an oral promise in the same position, unless it is made by deed. The document in question was not a deed, and the absence of consideration was therefore fatal to its enforceability.
The court further observed that the policy rationale underlying the rule against past consideration is sound. English law declines to enforce gratuitous promises — that is, promises made without anything being given in return. A promise to pay for work already done and already paid for by the promisee is, in substance, a gratuitous promise: the promisor receives nothing from the promisee as a result of the promise, since the act that is said to constitute consideration was wholly independent of it. To enforce such promises would, in effect, convert unilateral gifts into contracts, undermining the basic function of the consideration doctrine as a test of contractual intention and enforceability.
The court was not moved by arguments rooted in unjust enrichment or moral obligation. The beneficiaries had undoubtedly obtained a benefit from the improvements to the bungalow, and Mrs McArdle had suffered a financial detriment. However, the law of contract in England does not impose liability merely on the ground that one party has been enriched at the expense of another in circumstances where no valid contract exists. The appropriate avenue for such claims may lie elsewhere — whether in the law of unjust enrichment or equity — but contract law cannot be stretched to accommodate a past consideration as though it were a present one.
Holding
The Court of Appeal held that the promise made by the children to pay Mrs McArdle £488 was unenforceable as a matter of contract law. The consideration relied upon by the executor was entirely past: all the work had been completed before the document was signed, and the improvements had not been carried out at the request of the beneficiaries. No valid contract therefore came into existence.
The prior request exception established in Lampleigh v Brathwait (1615) Hob 105 was inapplicable because the essential factual prerequisite — that the act be performed in response to a request from the promisor — was absent on the facts. The appeal was accordingly dismissed and the executor's claim failed.
The principle applied is clear and unqualified: past consideration is no consideration in English law, and a promise to reward a completed act, made without any prior request or mutual understanding as to payment, cannot be enforced as a contract.
Significance and Subsequent Application
Re McArdle is recognised as one of the leading modern authorities on the doctrine of past consideration and is routinely cited in academic textbooks and judicial decisions as a definitive illustration of the principle. Its significance lies not in the novelty of the legal rule applied — the rule against past consideration is of considerable antiquity — but in the clarity with which it demonstrates the operation of the doctrine in a factually accessible context. The domestic and familial setting of the dispute makes the case particularly useful for pedagogical purposes, as it strips the principle down to its essentials.
The case also serves as a useful counterpoint to the prior request exception, and its treatment of Lampleigh v Brathwait (1615) Hob 105 helps to define the precise boundaries of that doctrine. By holding that the exception requires an actual request preceding the act — and not merely a subsequent promise to pay for a beneficial act — the court ensured that the exception does not swallow the rule. Subsequent cases applying the prior request exception, such as Re Casey's Patents [1892] 1 Ch 104, have consistently required evidence of a prior request as a prerequisite.
Re McArdle is also significant in illustrating the limitations of contract law as a mechanism for remedying situations that may, in justice, seem to call for compensation. The court's refusal to distort the consideration doctrine to achieve a just outcome in the particular case reflects the English courts' commitment to maintaining conceptual coherence in the law of contract, leaving claimants who lack a valid contract to pursue alternative remedies in restitution or equity where available.
In the wider doctrinal landscape, Re McArdle stands alongside Roscorla v Thomas (1842) 3 QB 234 as one of the clearest judicial statements of the past consideration rule, and it continues to be applied by courts and cited by commentators when the question of the temporal relationship between consideration and promise arises. The decision reinforces that the courts will not permit the mere documentation of a moral obligation to retrospectively give contractual force to what is, in substance, a gratuitous promise.