Implied Assumpsit

kazzasingh's version from 2017-05-16 09:09


Question Answer
Lampleigh v Braithwait (1615)Brathwait killed a man. He asked Lampleigh to ride to the King and petition for a pardon. Lampleigh was successful. Braithwait promised £100 to Lampleigh. But he never paid up. Lampleigh sued. Braithwait said that because the service had been performed in the past, there was no good consideration at the time for the promise, regardless of the fact that Lampleigh was successful in securing a pardon. The Court of the King's Bench held that there was an implied understanding (i.e. implied assumpsit, or "assumption" of obligation) that a fee would be paid. WHERE A PAST BENEFIT WAS CONFERRED AT THE BENEFICIARY'S REQUEST, AND WHERE A REWARD WOULD REASONABLY BE EXPECTED, THE PROMISOR WOULD BE BOUND BY HIS PROMISE.
Re Casey's Patent (1892)A and B owned a patent and C was the manager who had worked on it for two years. A and B then promised C a one-third share in the invention for his help in developing it. The patents were transferred to C but A and B then claimed their return. It was held that C could rely on the agreement. Even though C's consideration was in the past,IT HAD BEEN DONE IN A BUSINESS SITUATION, AT THE REQUEST OF A AND B AND IT WAS UNDERSTOOD BY BOTH SIDES THAT C WOULD BE PAID and the subsequent promise to pay merely fixed the amount.
Pao On v Lau Yiu Long (1980)P's promise not to sell the shares for a year was valid consideration, Privy Council applied Re Casey's Patents [1892]. Lord Scarman: .. an act done before the giving of a promise to make a payment or to confer some other benefit can sometimes be consideration for the promise. The act must have been done at the promisors' request: the parties must have understood that the act was to be remunerated either by a payment or the conferment of some other benefit: and payment, or the conferment of a benefit, must have been legally enforceable had it been promised in advance. All three features are present in this case...


Question Answer
"Consideration moves from the promisee" Tweddle v Atkinson [1861]John Tweddle and William Guy mutually agreed in writing to pay sums of money (£100 and £200, respectively) to Tweddle's son William (who was engaged to Miss Guy). Guy then died before payment, and when the estate would not pay, Tweddle jr. then sued Mr Atkinson, the executor of Guy's estate, for the promised £200. The court held: Tweddle jr's suit would not succeed as no stranger to the consideration may enforce a contract, although made for his benefit. The court ruled that a promisee cannot bring an action unless the consideration from the promise moved from him. Consideration must move from party entitled to sue upon the contract. No legal entitlement is conferred on third parties to an agreement. Third parties to a contract do not derive any rights from that agreement nor are they subject to any burdens imposed by it. It was left unanswered if the groom's father could have successfully sued the estate instead.


Question Answer
TANGIBLE RETURNS Thomas v Thomas [1842]A husband wished for his wife to inherit his house. The executors of the husband’s will agreed that the wife could have possession of the house in return for the wife paying £1 per year ground rent. The executors refused to go through with the agreement. HELD: Consideration must be present, but it need not be sufficient.
TANGIBLE RETURNS Chappel v Nestle [1960]Nestle ran a promotion whereby 3 sweet wrappers and 1 shilling could be sent by post to be sent back a record valued at 6 shillings. Chappel, a record seller, applied for an injunction to prevent the sale at such a price, as Nestle was not paying the statute-required 6.25% of the purchase price (of 6 shillings) to the copyright holders. HELD: Sweet wrappers could be good consideration. Consideration need not be sufficient. Nestle encouraged sales of sweets therefore the consideration was valuable to them.
TANGIBLE RETURNS HMRC v Aimia Coalition Loyalty UK Ltd [2013]The issue in the appeal was whether Aimia, which operates the Nectar reward scheme, is entitled to deduct as input tax the VAT element of payments which it makes to retailers which redeem Nectar points for collectors. HELD: The taxpayer argued that the payments to the redeemers were consideration for supplies of services, which the taxpayer was contracted to procure for collectors under the loyalty scheme. The taxpayer was “entitled to reclaim VAT incurred on payments made to high street retailers in respect of goods supplied to customers in exchange for their Nectar points”.
TANGIBLE RETURNS Lipkin Gorman v Karpnale Ltd [1992]The plaintiff firm of solicitors sought to recover money which had been stolen from them by a partner, and then gambled away with the defendant. He had purchased their gaming chips, and the plaintiff argued that these, being gambling debts, were worthless, and that therefore no consideration had been given. Held: The casino’s defence succeeded. The defence against a restitutionary claim that the defendant had altered his position was available to a person who had changed his position actin in good faith so that it would be inequitable to require him to make restitution. HELD: Lord Goff said: ‘where an innocent defendant’s position is so changed that he will suffer injustice if called upon to repay or to repay in full, the injustice of requiring him so to repay outweighs the injustice of denying the plaintiff restitution. If the plaintiff pays money to the defendant under a mistake of fact, and the defendant then, acting in good faith, pays the money or part of it to charity, it is unjust to require the defendant to make restitution to the extent that he has so changed his position. Likewise, on facts such as those in the present case, if a thief steals my money and pays it to a third party who gives it away to charity, that third party should have a good defence to an action for money had and received. In other words, bona fide change of position should of itself be a good defence in such cases as these.
TANGIBLE RETURNS De La Bere v Pearson Ltd [1908]a newspaper offered free financial advice. When the plaintiff wrote in he was given the name of a stockbroker who was an undischarged bankrupt who misappropriated the money sent to him. In order to allow the plaintiff a remedy, a contract was said to exist between him and the newspaper – CONSIDERATION WAS SEEN AS THE ‘BENEFIT’ TO THE NEWSPAPER of increased sales. The plaintiff also suffered the DETRIMENT of bad advice.
INTANGIBLE RETURNS White v Bluett (1853)Mr Bluett had lent his son some money. Mr Bluett died. The executor of Mr Bluett's estate was Mr White. He sued the son to pay back the money. In his defense, the son argued that his father had said the son need not repay if the son would stop complaining about how Mr Bluett would distribute his property in his will among the children. HELD: there was no consideration as the son had ‘no right to complain’ anyway. Not complaining was therefore an entirely intangible benefit.
INTANGIBLE RETURNS Hamer v. Sidway (US)Story (D) agreed with his nephew William (P) that if P would refrain from drinking, using tobacco, swearing, and playing cards or billiards for money until he became 21, D would pay him $5,000. When P became 21 he wrote a letter to D stating that P had performed his part of the agreement and had earned the $5,000. P and D agreed that $5,000 plus interest should remain with D until P was capable of taking care of it. D died without paying P the $5,000 plus interest. Judgment for D. P appealed. HELD: Yes. Judgment reversed. Valuable consideration may consist either in some right, interest, profit, or benefit accruing to one of the parties or some forbearance, detriment, loss, or responsibility given, suffered, or undertaken by the other party. Here, the court found that it is sufficient that P restricted his lawful freedom of action within certain prescribed limits upon the faith of D’s agreement.

Performance of Existing duty as Consideration?

Question Answer
Collins v Godefroy (1831)In earlier litigation, the defendant in this action, Godefroy, had subpoenaed the plaintiff, Collins, to give evidence on his behalf, agreeing to pay his expenses. The defendant had then refused to pay the plaintiff. The plaintiff then commenced this action to recover his expenses. HELD: That since the law imposes a duty on people to turn up, a promise of remuneration to do that which the court requires is without consideration.
Ward v. Byham [1956]An unmarried couple had a child together and lived together for five years. The father then turned the mother out of the house and sent the child to live with a neighbour and the father paid the neighbour £1 per week. The mother then got a job as a live in house keeper and wished to have the daughter live with her. The father agreed to allow the daughter live with the mother and agreed to pay her £1 per week provided she ensured the child was well looked after and happy. The father made payments but then when the mother remarried he stopped making payments. The mother brought an action to enforce the agreement. The father argued that the Mother was under an existing legal duty to look after and maintain the child and therefore was not providing any consideration for the promise to make payment.Held:By promising to ensure the child was well looked after and happy she had gone beyond her existing legal duty and therefore had provided consideration. She was entitled to the payment.
Glasbrook Brothers Ltd. v Glamorgan County Council [1924]During a strike, Glasbrook Brothers (the owners of a colliery) requested police protection in the form of a body of officers quartered on the premises; though the police only had the resources to make visiting patrols, they offered to place constables in exchange for a financial contribution. After the strike, the police presented the colliery with a bill for the provided services; the colliery refused to pay and so the police sued. The issue before the court was whether the police authority had provided fresh consideration for Glasbrook Bros' promise to pay. HELD: There is an obligation on the police to afford efficient protection, but if an individual asks for special protection in a particular form, for the special protection so asked for in that particular form, the individual must pay.
Harris v Sheffield United [1987]The court was asked whether services provided by the police at Sheffield United Football Club for the club’s home fixtures were ‘special police services’ so that if they were provided at the club’s request the police could charge for them. The attendance of the police is necessary to assist the club in the fulfilment of this duty. The matches take place regularly and usually at weekends during about eight months of the year. Though the holding of the matches is of some public importance because of the wide spread support in the local community both for the game and the club, the club is not under any legal duty to hold the matches. The charges which the police authority seek to make, and have made, relate solely to the officers on duty inside the ground and not to those in the street or other public places outside.
3rd PARTY Shadwell v. Shadwell (1860)Mr Shadwell was engaged to marry Ellen Nicholl (this is a binding contract). His Uncle Charles promised £150 a year in a letter after the marriage. Sadly, Uncle Charles died. Mr Shadwell alleged that his Uncle had not paid in full before the death and claimed the outstanding money from his Uncle's estate. The estate refused to pay on the ground that Mr Shadwell had given no consideration for the promise to pay the £150 pa. HELD: it would be a valid consideration for the court to enforce a contract if a pre-existing duty was performed, so long as it was for a third party and not for the promisor.
Contracts (Rights of Third Parties) Act 1999The Act allows third parties to enforce terms of contracts that benefit them in some way, or which the contract allows them to enforce. It also grants them access to a range of remedies if the terms are breached. The Act also limits the ways in which a contract can be changed without the permission of an involved third party. At the same time, it provides protection for the promisor and promisee in situations where there is a dispute with the third party, and allows parties to a contract to specifically exclude the protection afforded by the Act if they want to limit the involvement of third parties.