Consideration (Contract Law)

Consideration Essay (Keith)

Keith may not have to pay the extra £2,000 he promised to Tech LTD. Keith offered £15,000 to Tech LTD to install a multimedia projection system by the 20th December for an upcoming conference. This formed a legally binding contract.

However on the 15th December Tech LTD approached Keith and explained that they could not complete the installation until the 5th January. Keith reluctantly agreed to pay an extra £2,000 so Tech LTD could hire extra electricians in order to complete the system in time. Keith now refuses to pay the extra £2,000. The legal issue is whether there was sufficient consideration to support this agreement.

First it could be stated that Tech LTD performing extra hours of work and hiring more help was simply performing an existing contractual duty, especially since they were given a set date to complete the work by and yet failed without extra incentive which shows they were merely completing the already existing contractual duty and therefore is not good consideration (Stilk V Myrrick). However it may also be stated that the performance of extra hours was going past the expectations of the existing contract and therefore is good consideration (Hartley V Ponsonby).

As part of consideration the six part Glidewell criteria must also be applied from the case of Williams. Firstly Tech LTD did enter into a contract with Keith to supply goods and services for payment. Secondly Keith did doubt Tech LTD’s ability to complete the contract on time as they told him so. Thirdly Keith did offer additional payment for the contract to be complete on time. Fourthly Tech LTD received the benefit of payment. Fifthly Keith was under duress as the multimedia system was needed in time for the conference. And finally the benefit to Keith was good consideration as services and goods were supplied.

In conclusion Keith may not have to...