4.1 Define the term 'consideration' using a supporting authority

4.2 Colin owns a coffee shop where he makes sandwiches to order. To boost business, he runs a promotion:

"Buy 10 regular coffees, get your loyalty card stamped each time, and I will give you a free coffee."

Jackie goes in with her loyalty card, which has been correctly stamped ten times and orders her free coffee.

Rebecca goes in and orders only a sandwich from Colin. She waits while he makes it for her and then pays him.

For each contract,

(i) Describe the consideration offered by each party

(ii) Using the contract between Colin and Rebecca as an illustration, describe the distinction between executed and executory consideration

4.3 For each question following, explain your answer in full, relying on the relevant principle/s with appropriate authorities where they are available:

(i) Bliss promises to pay Oscar and Lucinda, as joint promisees, $250 for a complete collection of Peter Casey books. In fact, the books belong to Lucinda. If Lucinda gives Bliss the books but Bliss refuses to pay for them, can Oscar sue Bliss?

(ii) Dexter goes to Petunia's Precious Pots and pays $600 for a handmade pot. Dexter asks that, once it is made, it be delivered to Katie. Petunia delivers the pot to Katie. The next day, Dexter and Katie break up. Dexter wants his money back. Has Petunia provided good consideration here for Dexter's payment of $600?

(iii) Dave and Jon enter into a contract for the sale of Dave's moped to Jon. After paying Dave, Jon proudly takes delivery of the moped. As Jon is leaving, Dave tells him that the moped has a modified engine and can easily reach speeds of 125 kilometres per hour. In fact, the engine has not been modified and the moped can do no more than 90 kilometres per hour. Considering the rules of consideration, does Jon have a cause of action based on Dave's incorrect statement?

(iv) Maria wants to sell her house and sail around the world. The housing market is severely depressed, and an independent valuation values her house at $550 000. Maria signs a contract to sell her house to Conrad in exchange for his ocean going yacht which is worth $120 000. Considering only the principles of consideration you have learned, would a court most likely set aside the contract?

4.4 Pauline is a Public Relations professional who is helping a property developer client market a new block of apartments. She employs Wayne to build a virtual apartment for buyers to 'walk' through. She explains to him that it is critical that the work be finished by Friday 13th of May when the development will be launched. Wayne is charging her $50 000.

Consider the followingalternativescenarios:

(i) Wayne tells Pauline that he under quoted and that a fair price would be $65 000. Pauline agrees to pay Wayne the extra $15 000 and he finishes the work in accordance with the contract.

She no longer wants to pay the extra money. Advise her on whether she is under a legal obligation to do so and explain why, stating the relevant legal principles and authorities.

(ii) Pauline explains to Wayne that it is critical that the work be finished by Friday 13^thof May when the development will be launched. On Tuesday 10^thof May, Wayne tells Pauline that he will not have the virtual apartment ready for the launch. Not only will Pauline be severely embarrassed, but due to a clause in her contract with the property developer, she will have to pay a penalty of $20 000 for each week or part thereof that the launch is delayed. Wayne tells Pauline that he can finish on time if he employs extra people at a cost of $30 000. Pauline agrees to pay Wayne the extra $30 000. He finishes on time and the launch is successfully held on 13^thof May.

She no longer wants to pay the extra money. Advise her whether she is under a legal obligation to do so and explain why, stating the relevant legal principles and authorities.

4.5 Nan is an elderly woman who has an accident. She is so appreciative of the care she receives as a public patient at the Brisbane Public Hospital that she promises to give her nurse $1 000. The nurse promises that she will continue to take good care of Nan.

Can the nurse enforce Nan's promise? Explain why you came to this answer, stating the relevant principles with appropriate authorities.

4.6 Leo has bought an old house. He employs Tim to paint it for him. Leo's neighbour, Sheng, is so happy to see the house being well cared for that he promises Tim that, in consideration for Tim painting Leo's house, Sheng will build a website to promote Tim's business.

Can Tim enforce Sheng's promise? Explain why you came to this answer, stating the relevant principles with appropriate authorities.

4.7 Dorothy owes Charlie $1 000. Dorothy has lost her job and has told Charlie that she can't re-pay the debt to him. Consider the following alternative scenarios and advise Charlie if he can recover the outstanding balance of $600, which will be left in each of the following circumstances:

(i) Charlie agrees to take $400 in full satisfaction of the debt

(ii) Charlie signs a deed agreeing to take $400 in full satisfaction of the debt

(iii) Charlie takes $400 from Dorothy's sister, in full satisfaction of the debt

In each case, explain why you came to your answer, stating the relevant principles with appropriate authorities.

4.8 Lily is a law student who has started studying contract law. One day her beloved cat, Lord Denning, was hit by a car. Lily rushed Lord Denning to the vet who performed emergency surgery that saved Lord Denning's life. The vet billed Lily $3 000. Lily was shocked, but recalled the rule that past consideration is not good consideration. She pointed out to the vet that he had already cared for her cat (past consideration) and, as Lily had made no promise to pay for that service, she was under no obligation to pay the vet.

Advise Lily. Explain why you came to this answer, stating the relevant principles in full with appropriate authorities.

4.1 Define the term 'consideration' using a supporting authority

4.2 Colin owns a coffee shop where he makes sandwiches to order. To boost business, he runs a promotion:

"Buy 10 regular coffees, get your loyalty card stamped each time, and I will give you a free coffee."

Jackie goes in with her loyalty card, which has been correctly stamped ten times and orders her free coffee.

Rebecca goes in and orders only a sandwich from Colin. She waits while he makes it for her and then pays him.

For each contract,

(i) Describe the consideration offered by each party

(ii) Using the contract between Colin and Rebecca as an illustration, describe the distinction between executed and executory consideration

4.3 For each question following, explain your answer in full, relying on the relevant principle/s with appropriate authorities where they are available:

(i) Bliss promises to pay Oscar and Lucinda, as joint promisees, $250 for a complete collection of Peter Casey books. In fact, the books belong to Lucinda. If Lucinda gives Bliss the books but Bliss refuses to pay for them, can Oscar sue Bliss?

(ii) Dexter goes to Petunia's Precious Pots and pays $600 for a handmade pot. Dexter asks that, once it is made, it be delivered to Katie. Petunia delivers the pot to Katie. The next day, Dexter and Katie break up. Dexter wants his money back. Has Petunia provided good consideration here for Dexter's payment of $600?

(iii) Dave and Jon enter into a contract for the sale of Dave's moped to Jon. After paying Dave, Jon proudly takes delivery of the moped. As Jon is leaving, Dave tells him that the moped has a modified engine and can easily reach speeds of 125 kilometres per hour. In fact, the engine has not been modified and the moped can do no more than 90 kilometres per hour. Considering the rules of consideration, does Jon have a cause of action based on Dave's incorrect statement?

(iv) Maria wants to sell her house and sail around the world. The housing market is severely depressed, and an independent valuation values her house at $550 000. Maria signs a contract to sell her house to Conrad in exchange for his ocean going yacht which is worth $120 000. Considering only the principles of consideration you have learned, would a court most likely set aside the contract?

4.4 Pauline is a Public Relations professional who is helping a property developer client market a new block of apartments. She employs Wayne to build a virtual apartment for buyers to 'walk' through. She explains to him that it is critical that the work be finished by Friday 13th of May when the development will be launched. Wayne is charging her $50 000.

Consider the followingalternativescenarios:

(i) Wayne tells Pauline that he under quoted and that a fair price would be $65 000. Pauline agrees to pay Wayne the extra $15 000 and he finishes the work in accordance with the contract.

She no longer wants to pay the extra money. Advise her on whether she is under a legal obligation to do so and explain why, stating the relevant legal principles and authorities.

(ii) Pauline explains to Wayne that it is critical that the work be finished by Friday 13^thof May when the development will be launched. On Tuesday 10^thof May, Wayne tells Pauline that he will not have the virtual apartment ready for the launch. Not only will Pauline be severely embarrassed, but due to a clause in her contract with the property developer, she will have to pay a penalty of $20 000 for each week or part thereof that the launch is delayed. Wayne tells Pauline that he can finish on time if he employs extra people at a cost of $30 000. Pauline agrees to pay Wayne the extra $30 000. He finishes on time and the launch is successfully held on 13^thof May.

She no longer wants to pay the extra money. Advise her whether she is under a legal obligation to do so and explain why, stating the relevant legal principles and authorities.

*Note: You will need to know a particular case to answer this question successfully. Please ensure that your answer includes all the requirements set out in that case.

4.5 Nan is an elderly woman who has an accident. She is so appreciative of the care she receives as a public patient at the Brisbane Public Hospital that she promises to give her nurse $1 000. The nurse promises that she will continue to take good care of Nan.

Can the nurse enforce Nan's promise? Explain why you came to this answer, stating the relevant principles with appropriate authorities.

4.6 Leo has bought an old house. He employs Tim to paint it for him. Leo's neighbour, Sheng, is so happy to see the house being well cared for that he promises Tim that, in consideration for Tim painting Leo's house, Sheng will build a website to promote Tim's business.

Can Tim enforce Sheng's promise? Explain why you came to this answer, stating the relevant principles with appropriate authorities.

4.7 Dorothy owes Charlie $1 000. Dorothy has lost her job and has told Charlie that she can't re-pay the debt to him. Consider the following alternative scenarios and advise Charlie if he can recover the outstanding balance of $600, which will be left in each of the following circumstances:

(i) Charlie agrees to take $400 in full satisfaction of the debt

(ii) Charlie signs a deed agreeing to take $400 in full satisfaction of the debt

(iii) Charlie takes $400 from Dorothy's sister, in full satisfaction of the debt

In each case, explain why you came to your answer, stating the relevant principles with appropriate authorities.

4.8 Lily is a law student who has started studying contract law. One day her beloved cat, Lord Denning, was hit by a car. Lily rushed Lord Denning to the vet who performed emergency surgery that saved Lord Denning's life. The vet billed Lily $3 000. Lily was shocked, but recalled the rule that past consideration is not good consideration. She pointed out to the vet that he had already cared for her cat (past consideration) and, as Lily had made no promise to pay for that service, she was under no obligation to pay the vet.

Advise Lily. Explain why you came to this answer, stating the relevant principles in full with appropriate authorities.