ACCA F4 - Corp and Business Law (ENG)

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60 4: Formation of contract II  Part B The law of obligations


2.2.1 Performance of existing contractual duties


Performance of an existing obligation imposed by statute is no consideration for a promise of reward.

Collins v Godefroy 1831
The facts: The claimant had been subpoenaed to give evidence on behalf of the defendant in another case.
He alleged that the defendant had promised to pay him six guineas for appearing.
Decision: There was no consideration for this promise.

But if some extra service is given that is sufficient consideration.

Glasbrook Bros v Glamorgan CC 1925
The facts: At a time of industrial unrest, colliery owners, rejecting the view of the police that a mobile force
was enough, agreed to pay for a special guard on the mine. Later they repudiated liability saying that the
police had done no more than perform their public duty of maintaining order, and that no consideration
was given.
Decision: The police had done more than perform their general duties. The extra services given, beyond what
the police in their discretion deemed necessary, were consideration for the promise to pay.

In the Glasbrook case the threat to law and order was not caused by either of the parties. Where one
party's actions lead to the need for heightened police presence, and the police deem this presence
necessary, they may also be entitled to payment.

Harris v Sheffield United FC Ltd 1988
The facts: The defendants argued that they did not have to pay for a large police presence at their home
matches.
Decision: They had voluntarily decided to hold matches on Saturday afternoons when large attendances
were likely, increasing the risk of disorder.

2.2.2 Promise of additional reward


If there is already a contract between A and B, and B promises additional reward to A if they (A) perform
their existing duties, there is no consideration from A to make that promise binding.

Stilk v Myrick 1809
The facts: Two members of the crew of a ship deserted in a foreign port. The master was unable to recruit
substitutes and promised the rest of the crew that they would share the wages of the deserters if they
would complete the voyage home short-handed. The shipowners however repudiated the promise.
Decision: In performing their existing contractual duties the crew gave no consideration for the promise of
extra pay and the promise was not binding.

If a claimant does more than perform an existing contractual duty, this may amount to consideration.

Hartley v Ponsonby 1857
The facts: 17 men out of a crew of 36 deserted. The remainder were promised an extra £40 each to work
the ship to Bombay. The claimant, one of the remaining crew-members, sued to recover this amount.
Decision: The large number of desertions made the voyage exceptionally hazardous, and this had the
effect of discharging the original contract. The claimant's promise to complete the voyage formed
consideration for the promise to pay an additional £40.
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