INTRODUCTION
Normally,you will find someone every day saying give me two packets of biscuits in a shop, could you courier this in a courier center, someone is ordering pizza on Swiggy or tomato, etc. which is a contract. That means on an everyday basis you may not encounter laws such as IPC, Constitution, Company Law, etc. But you do enter into many forms of oral, written, implied, and expressed forms of contract. That is why contracts are such an interesting aspect. For a contract to be legally valid, it must have a consideration otherwise the contract is void and unenforceable.Therefore,it is the sole contention of this treatise to analyze “whether or not past consideration is sufficient to enter a legal contract”
CONCEPTUAL ANALYSIS
It is of utmost necessary to describe some key concept in the given topic to wit:
CONSIDERATION :The Learned Authors of Oxford Dictionary of Law at page 117 describe it as “an act , forbearance,or promise by one party to a contract that constitutes the price for which he buys the promise of the other .”It has equally received judicial baptism vide in the case of Currie vs misa.”A valuable consideration in the eyes of law may consist either in some right, interest, profit or benefits acquiring to the one party or some forbearance, detriment, loss or responsibility given , suffered or undertaken by the other. In a similar vein, consideration means element of reciprocity something must be given by the promisee/offeree in returned for the promise of the promisor/ offeror, It suggests that the consideration for the promisee must be executed in the sense that the detriment must have been suffered or benefits must have been conferred as illustrated In the case of Dunlop pneumatic tyre Ltd vs. Selfridge
CONTRACT: According to Oxford Lexicon of Law, contract portrays an agreement which arises as a result of offer and acceptance, but a number of other requirements must be satisfied for an agreement to be legally binding.
PAST CONSIDERATION: It arises whenever a party makes a promise to another, because that party has in the past performed some services for him, the past act and the new promise are two separate and not a consideration. It also the third rules governing consideration in order of hierarchy.
LEGAL X-RAY OF PAST CONSIDERATION
In terms of a contract, past consideration is used to mean a promise or an act that was made or performed prior to a contract. Past consideration typically comes into play when someone is trying to enforce a new promise. When a new contract is written, past consideration will not count as consideration for the purposes of the contract. The reason for this is that past consideration occurred before the new contract was entered, meaning it could not have been provided for the new contract.
Past consideration cannot be included in a contract mostly because it did not benefit the promisor or pose any risk to the promisee. For a contract to be valid, it absolutely must include consideration. In a two-person contract for example, both parties involved must promise something, whether it is a specific act or an agreement to pay a certain amount of money.It has been judicially blessed vide the case of William R. Anson, where the court held thus:“A past consideration is, in effect, no consideration at all; that is to say, it confers no benefit on the promisor, and involves no detriment to the promisee in respect of his promise. It is some act or forbearance in time past by which a man has benefited without thereby incurring any legal liability.”
TYPES OF CONSIDERATION
There are two types of consideration which are: Executory and executed consideration
EXECUTORY CONSIDERATION: It means that when there’s an exchange of promise to perform an act in the future. Example: Bilateral contract.
EXECUTED CONSIDERATION: where one party performs an act in fulfillment of a promise made by another. For example in unilateral contract.
RULES GOVERNING CONSIDERATION
As far as Law is concerned, there are five rules governing consideration, and they are:
a)Consideration must not be illegal, immoral or contrary to the public policy as established in the case of Eastwood vs Kenyon, (1840) 11 Ad & E 438, QB,where the court held that against the claimant, that the claimant’s actions happened before the husband and daughter’s promises, and so were past consideration. This was not good consideration. There was therefore no contract
b)Consideration must move From the promisee to the promisor as seen in the case of Ikomi vs Bank of West AfricaLTD (1965) 1 ANLR 39, where the court established that the Supreme Court held that the judicial task is not to discover the actual intention of each party, it is to decide what each was reasonably entitled to conclude from the attitude of the other.
c)Consideration must not be in the past as judicially blessed vide the case of Roscorla vs Thomas,(1842) 3 QB 234 where the court states that The Court held in favour of the defendant. The claimant had already agreed to buy the horse. He could not rely on his obligations under that contract as consideration for the defendant’s later promise. The promise was therefore unenforceable
d)Consideration needs not to be adequate as seen in the case of Thomas vs Thomas (1842) 2 QB 851; 114 E.R. 330 ,where the High Court held in favour of the claimant. Her agreement to pay a contribution to the ground rent and maintain the house was legally valuable. She therefore provided good consideration. The defendant’s grant of an interest in the house meant that he also provided good consideration. His motive for providing the consideration was irrelevant.:
e)Consideration must be sufficient as evident in the case of White vs Bluet, (1853) 23 LJ Ex 36 where the court held that there was no consideration given by the son which would absolve him of having to repay the debt to his father’s estate. The court also believed that the son had no right to complain as the father was free to distribute his property as he wished. As a result, ceasing from complaining was not consideration and was ultimately an intangible promise. Pollock, CB was clear in his summing up of the decision: ‘…the argument…is pressed to an absurdity, as a bubble is blown until it bursts’.
RELEVEANCE ATTACHED TO PAST CONSIDERATION.
Knowledge about past considerations is very important. Because in day-to-day life we enter into such a contract where we cannot get the consideration as it is past consideration. Past consideration which as normal rule isn’t satisfactory to make a promise confining. In such a case the promisor may by his promise see a moral responsibility which is not a consideration; anyway, he isn’t obtaining anything as a trade-off for his promise because he as of now has it before the promise is made.
As far as Law of contract is concerned, past consideration is utilized to mean a guarantee or a demonstration that was executed or made preceding the contract. Past consideration ordinarily becomes an integral factor when somebody is attempting to uphold another new promise. At the point when another promise is composed, past consideration won’t be considered for the validity behind the agreement. The justification for this is that past consideration happened before the new agreement came into force, which means it couldn’t have been accommodated for the new agreement.
WHETHER PAST CONSIDERATIONS ARE VALID OR NOT.
The English law does not recognize a past consideration. In English, Law consideration may be present or future but not past. Past consideration is no consideration at all in English Law. Hence an agreement based on past consideration is void. Consideration may be executory but it must not be passed. As vividly established In Roscarla v Thomas, where the court held that the consideration given at the time of contract of sale, was no consideration for the subsequent promise and hence the promise was unenforceable. Also, in Re McArdle, It was held by the Court of Appeal that since the consumption had been brought about before the report was signed, that was past consideration and thus the promise could not be authorized.
SOME ILLUSTRATIONS UNDER PAST CONSIDERATION
1. Past consideration is also called moral consideration. For example, that you’re going for a stroll and see someone has fallen and got hurt. You at that point went to help the harmed individual and assisted them with medication. To show their appreciation, the other individual promises to pay you Rs. 1,000. The care that you have given the harmed individual would be considered past consideration. Despite the fact that you were not lawfully needed to help them, you felt ethically and morally committed, and your satisfaction of this ethical duty brought about you being paid.
2. If A looks after the children of B at B’s request. A year later, B agreed to pay A. a sum of Rs.2000 for his services. For the promise of B, the services of A will be taken as past consideration.
EXCEPTIONS TO PAST CONSIDERATION
There is no gainsaying in deny the fact that “For every general rule, there must be an exception” which can also be replicated in this extant Latin Maxim—Exceptio Probat Regulam.In the light of this,the exceptions or instances where rule of past consideration will not apply under common law are:
1. Where services are rendered at the “request, express or implied, of a person who subsequently promises to pay for them; and in circumstances in which it can reasonably be assumed that the parties intended that the service would` ultimately be paid for. In such a case, the presumption is that the request contains an implied promise to pay for the service what it is worth, and that the subsequent express promise to pay is merely an assessment of the value of service. This exception was illustrated in the case of Lampleigh v Brathwait (1615) Hob 105.., where it was held that the plaintiff was entitled to the sum as his service were procured at the defendant’s previous request and in circumstances in which it was reasonable to expect that payment would be made for the services. Thus, there was consideration for the defendant’s promise.
2. The parties must have understood that the act was to be remunerated whether by payment or conferment of some other benefits.
3. And payment, or the conferment of a benefit must have been legally enforceable, had it been in advance, Subsequently, their Lordships added in the case of Currie v Misa LR 10 Ex 153 (1875) ” …..the mere existence or recital of prior request is not sufficient in its self to convert what is prime facie past consideration into sufficient consideration in law to support a promise.”
STATUTORY PROVISION FOR EXCEPTIONS OF PAST CONSIDERATION
1. The second exception to past consideration is contained in section 27(1) Bill of Exchange Act 1882 which provides that valuable consideration for a bill of exchange (for example a cheque) may be constituted by an “antecedent debt or liability”. This means that a cheque given in payment of a previous debt is given for valuable consideration. Accordingly, a payee can enforce it in a court of law.
2. The third exception to past consideration is provided for under Section 37 Limitation Act (Nigeria). This section provides that where a debt is statute barred but the debtor there after acknowledges the debt or promise to pay it, the acknowledgement or promise is binding. An acknowledgement or promise to pay debt after a limitation period must be very clear in order to result in an enforceable promise to pay the debt.
CONCLUSION
In order for a promise to be enforceable as a contract, the promise must be supported by valid consideration The essence of consideration is a legal detriment that has been bargained for and exchanged for the promise. In short, the detriment must induce the promise.The general rule is that past consideration is not consideration Also,the case of Citibank v London, 526 F Supp 793, 803) also reiterates that “A promise supported by past consideration is unenforceable because the detriment did not induce the promise. That is, `since the detriment had already been incurred, it cannot be said to have been bargained for in exchange for the promise.Without mincing words,the ensuing content of this article has justified the extant issue as to whether or not past consideration is sufficient to enter a legal relation.
REFERENCES
1.IE SAGE:NIGERIAN LAW OF CONTRACT
2. JC : SMITH:LAW OF CONTRACT
3.ELIZABETH A.MARTIN, JONATHAN LAW: OXFORD DICTIONARY OF LAW(SIXTH EDITION)
4. Nigerian law report
5.https://qsstudy.com/business-studies/types-of-considerations-with-an-example
6. Williams R. Anson, principles of law of contract pg 149 (1919)
JUDICIAL AUTHORITIES.
7.Currie v Misa is LR 10 Ex 153 (1875)
8.Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd [1915] UKHL 1, [1915] AC 847
9.Eastwood v Kenyon (1840) 11 Ad & E 438, QB
10.IKOMI VS. BANK OF WEST AFRICA LTD (1965) 1 ANLR 39,
11.Roscorla v Thomas (1842) 3 QB 234
12.Thomas v Thomas (1842) 2 QB 851; 114 E.R. 330, Queen’s Bench Division.
13.White v Bluett (1853) 23 LJ Ex 36
14.Citibank v London, 526 F Supp 793, 803)
STATUTORY AUTHORITIES.
15.Section 27 (1) Bill of Exchange Act 1882
16.Section 37 of Limitation Act, cap 522 LFN 1990 Nigeria
ABOUT THE AUTHOR
Misbahudeen Habeebullahi Akanji is a Penultimate Common and Islamic Law Student at Bayero University Kano,Director of Operations, Solace Chambers, a certified Associate of slamic Banking and finance (ACIBF 2024),Certified mediator from United States of America. He can be reached vide Whatsapp :+2347031105069.Email:This is my email
Misbahudeen247@gmail.com
