Description of the legal term Past Consideration:
In the context of contract law in the United Kingdom, the doctrine of past consideration revolves around the timing of the consideration provided in return for a promise. Consideration is one of the essential elements required to establish a legally binding contract and is defined as something of value given by a promisor to a promisee in exchange for something else of value given by a promisee to a promisor. For consideration to be effective, it must be given contemporaneously with or after the promise for which it is exchanged – it cannot precede the promise.
Past consideration occurs when the act or forbearance said to constitute consideration for a present promise was performed before the promise was made. The general rule in British jurisprudence is that past consideration is not valid consideration. This is rooted in the principle that a promise cannot be based upon something that has already been provided or performed; there must be a new benefit to the promisor or a detriment to the promisee.
However, there are exceptions to this rule, such as when past acts are performed at the promisor’s request with the understanding that they will be remunerated in the future, although this must usually be documented by evidence to be enforceable. In other words, if it was understood by both parties that the act would be compensated and the promise was made after the act based on this understanding, the past consideration may sometimes be considered as the inducement for the promise.
Moreover, it is important to distinguish past consideration from moral obligations. An action done from a moral obligation or out of kindness would not necessarily create a legal obligation for the promisee to fulfill a return promise, as the law requires a bargain or exchange of value, not simply gratitude or conscience.
An example of past consideration would clarify its implications. Consider a scenario where Person A helped fix Person B’s garden fence last year without being asked and without any expectation of compensation. This year, impressed by the work, Person B promises to pay Person A £200. If Person A tries to enforce this promise in a court of law, they would likely fail, as the consideration – the fixing of the fence – was past consideration when the promise of payment was made. Without a contemporaneous benefit to the promisor or a legal detriment to the promisee, no contract was formed.
Legal context in which the term Past Consideration may be used:
Take the landmark case of Roscorla v Thomas (1842). After Roscorla purchased a horse from Thomas, Thomas promised that the horse was free from vice. However, this promise came after the sale was completed. When the horse turned out to have vicious tendencies, Roscorla sued for breach of contract. The court held that the promise made by Thomas about the horse only after the sale constituted past consideration. Since the consideration – the purchase of the horse – was complete before Thomas made his promise, there was no new consideration provided for the promise that the horse was sound. As such, Roscorla’s promise was unenforceable and he was not entitled to any remedy under that promise.
Understanding the nuances of consideration, including the role of past consideration, is pivotal in the legal landscape. Clarity on this subject aids in determining whether a contractual agreement is enforceable and what parties can legitimately expect from contracts. Especially in commercial transactions, where the timing of promises and performances can impact businesses profoundly, past consideration emerges as a crucial aspect of contract law to ensure that all contractual obligations are founded on present or future transactions, rather than those already performed. This principle helps maintain the integrity of contract formation, ensuring fairness and reciprocity in legal agreements.
