Consideration and promissory estoppel

Consideration is the doctrinal price of a contract: a promise is enforceable only if the promisor receives something the law treats as valuable in exchange. Per Currie v Misa (1875), consideration consists either in benefit to the promisor or detriment to the promisee. The doctrine's rationale is to distinguish enforceable bargains from gratuitous promises, which (deeds apart) lack legal force.

Five cardinal rules govern: (1) consideration must move from the promisee; (2) consideration must be sufficient but need not be adequate; (3) past consideration is no consideration; (4) performance of an existing duty is not (usually) good consideration; (5) part-payment of a debt does not discharge the debt. Modern reformulations have softened the existing-duty rule through the Williams v Roffey practical-benefit doctrine, while promissory estoppel provides equitable relief where consideration fails but reliance has occurred.

Currie v Misa (1875) LR 10 Ex 153: Lush J defined consideration as "some right, interest, profit, or benefit accruing to the one party, or some forbearance, detriment, loss, or responsibility, given, suffered, or undertaken by the other." The standard formulation for 150 years.

Stilk v Myrick (1809) 2 Camp 317: Sailors already bound to work the ship home could not recover additional wages promised mid-voyage. Established the existing-duty rule that haunts variation cases.

Foakes v Beer (1884) 9 App Cas 605: Part-payment of a judgment debt, even if accepted by creditor, does not discharge the whole debt. Applied Pinnel's Case despite acknowledging potential injustice.

Williams v Roffey Bros [1991] 1 QB 1: Performance of existing duty can be consideration where promisor obtains practical benefit and no economic duress exists. Glidewell LJ's six-limb test modernised the existing-duty rule for commercial variations.

Central London Property Trust v High Trees House [1947] KB 130: Denning J held war-time rent reduction was binding during the war through promissory estoppel. Foundation of modern estoppel doctrine as defensive mechanism where consideration absent.

Courts apply consideration analysis in three steps. First, identify whether something of legal value moved from promisee to promisor—applying Currie v Misa's benefit/detriment test broadly (Chappell v Nestle—chocolate wrappers sufficient).

Second, test for disqualifying factors: (a) Was consideration past? Apply Re McArdle rule unless the Lampleigh v Brathwait exception applies (request, understanding of payment, commensurate amount). (b) Is promisee performing existing duty? Apply Stilk v Myrick unless practical benefit exists (Williams v Roffey) or duty owed to third party (Pao On). (c) Is this part-payment of debt? Foakes v Beer governs—no discharge unless payment differs in kind, time, or place.

Third, if consideration fails, consider promissory estoppel: clear promise, reliance, inequitable to resile (High Trees), but only as shield not sword (Combe v Combe), and no unclean hands (D & C Builders).

Students reliably make three errors. First, arguing courts should assess adequacy of consideration—wrong since Chappell v Nestle. Courts enforce bad bargains.

Second, claiming Williams v Roffey abolished the existing-duty rule. It created an exception via practical benefit, not abolition. Apply Glidewell LJ's test methodically.

Third, asserting Foakes v Beer no longer applies post-Williams v Roffey. The asymmetry stands: Re Selectmove confirmed it; MWB v Rock declined to overrule. Part-payment of debt still doesn't discharge the whole, despite criticism.