Explain FIVE rules that relate to consideration in the Law of Contract. (10 marks)
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- Necessity for consideration: every simple contract must be supported by consideration, otherwise, it is void.
- Legality of consideration, the consideration must be legal. i.e not some illegal act, like paying someone to commit a crime.
- Consideration must move from the promise, i.e a person seeking to enforce a simple contract in court must prove that he himself has given consideration in return for the promise he is seeking to enforce.
- Consideration must be something beyond the promisee’s existing obligations to the promisor. The promisee must have undertaking to do something for the person whose promise he is seeking to enforce, beyond what he was already bound to do.
- Consideration must be real: it must not be vague, indefinite or illusory.
- Consideration must not be past: a promise made in return for some past service is unenforceable.
- Payment of a smaller sum will not discharge a liability to pay a larger (the rule in the Foakes vrs Beer [1884]): if A owes B $100 and B agrees to accept $ 50 in complete discharge of the debt, there is nothing to stop B later from changing his mind and suing for the remaining $50)
( Any 5 points)