Advice to Choc Delux - Essay Example

16 August Advice to Choc Delux Consideration and the Law of Contract Under the English law of contract, acontract does not exist where consideration is missing. In the present instance, Kris is unable to claim damages from Choc Delux because consideration was missing in the provision of complimentary chocolate bars. To understand how this action does not fulfil the requirements of consideration, it is important to understand the concept of consideration in the law of contract. According to the law of contract, a valid contract must involve an exchange of consideration on both sides. In agreements by parol, consideration needs to be proved (Furmston 100). In case of a valid contract between two parties, both the parties must be a promisor as well as a promisee. This means that both must gain as well as lose something as a result of the transaction made under the terms of the contract. The consideration is what is exchanged between the contracting parties during the transaction. In the case of a contract for providing some services, consideration for the service provider is the receipt of payment whereas for the client, the consideration is the service rendered by the service provider. Hence, while consideration may be different for the contracting parties, it must flow from both sides by parties acting in the capacity of promisee. Consideration for one party may be in the form of cash while it may be in the form of intangible services or a tangible good for another. Nonetheless, the existence of consideration in one form or the other is essential for a valid contract. Requirements of Valid Consideration It is important for consideration to meet certain requirements before it may be considered as valid consideration. Consideration must not be a past action unless it was done in response to a specific request (Whincup 74). English law does not recognize past consideration as valid (Tonapi 2). In other words, a promise to provide some consideration must be made before it is provided or executed. In the present scenario involving Kris and the claim for damages, the provision of complimentary chocolates is not valid consideration because it was not agreed upon between the parties at the time the agreement for providing chocolate for the wedding cake was made. The complimentary chocolate was provided later as a goodwill gesture and was not an expected part of the contract. Secondly, the consideration must move from the promisee. The consideration should move from both sides but the parties must execute it in the capacity of promisee instead of promisor. Mutuality of agreement is an important element of valid consideration (Stone 93). In Currie v. Misa (1875) it was concluded that should involve a benefit to one party and some loss undertaken by the other party (Street 68). This implies that the contractual terms arising out of the specific consideration can only be enforced by the party providing the consideration. A gratuitous promise also does not constitute valid consideration or form a binding contract (McKendrick 491). However, in Access Organics, Inc. v. Hernandez (2008) it was concluded by the judge that in case of a noncompete agreement consideration exists on the part of the employer in the form of continued employment (Miller & Jentz 277). In the present case, the complimentary chocolate was provided by Choc Delux as a complimentary product and hence does not satisfy this requirement of valid consideration. Thirdly, consideration must be something of material value. The case of Hedley Byrne shows that in the absence of economic assets as consideration, an agreement is not a contract (Harlow 110). In other words, it must be sufficient. A contract cannot be enforced if insufficient consideration has been exchanged between the parties. However, the value of the consideration is up to the parties to determine (Collins 60). In the case Chappell & Co. v. Nestle Co. Ltd (1951), the court upheld that the intrinsic value of the consideration did not reduce the validity of the sufficiency of the consideration (Marson 141). In the present case, insufficient consideration was provided by the wedding couple in exchange for the chocolate bars provided by Choc Delux. Hence, insufficient consideration exists in this scenario and the law of contract cannot be invoked to claim for damages. The fourth requirement of consideration is that it should involve an action that the promisee is already bound to do under the existing terms of the agreement (Kumar 38). Furthermore, consideration may not be required for doing something that the party is already obligated to do under the contract. This was illustrated in the Stilk v. Myrick (1809) case where crew members of a ship could not enforce the promise of the captain to pay extra wages for additional work done in rough weather (Mulcahy 89). In other words, the performance of the act must have been foreseen and contemplated by the parties before the agreement is complete. The provisions of the law of contract cannot be invoked for an action that a party performs beyond the scope of the agreed upon terms. In Antons Trawling Co Ltd v Smith (2003) it was concluded at the New Zealand Court of Appeal that the value of consideration lies in its ability to indicate intention to be bound by both parties (Chen-Wishart 110). The present situation fails to meet this requirement of valid consideration too because the provision of complimentary chocolates was not contemplated by the parties at the time of making the agreement for providing chocolate for the wedding cake. Finally, the fifth requirement of valid consideration is that the consideration must be legal (Tulsian 42). The provision of complimentary chocolate bars to guests at the wedding is a legal action and meets the requirement of valid consideration. However, the action does not meet the criteria set by the previous four requirements; hence, the action does not constitute valid consideration and the provisions of the law of contract cannot be invoked by Kris to claim damages for any loss suffered as a result of the complimentary chocolates. It is true that Choc Delux had a responsibility to ensure that the chocolates served were of good quality and was fit for consumption. However, as these do not meet the criteria for valid consideration, the law of contract cannot be applied to this case. Evaluation of the Case When evaluated through the requirements of valid consideration, it appears that the action by Choc Delux to provide complimentary chocolate bars to the wedding guests was not part of any consideration for any promise. In fact, the action was done gratuitously as a gesture of goodwill. The action was not part of the original agreement concluded between the two parties. Even though it may have been the intention of Choc Delux at the time the agreement was being made that they would provide the chocolate bars at the wedding, it was not expressly stated as part of the arrangement between the two parties, nor was it an expected or customary part of such services. Furthermore, the law of contract states that consideration must move from both sides. But in the present case, the complimentary chocolate bars were not provided in exchange for any benefit or remuneration from the other party. Hence, the consideration was not quid pro quo and was entirely unilateral. It is distinguished from a contract as it is a gift (Beatty and Samuelson 602). For this reason too, the action does not constitute consideration and falls beyond the scope of the law of contract. As a result, Kris cannot claim damages for the loss of £50,000 she suffered for not performing the interview with E News! due to her poor health following the consumption of the expired chocolate. Works Cited Beatty, Jeffrey and Samuelson, Susan. Legal Environment. 3rd ed. Mason: Thomson West, 2008. Print. Chen-Wishart, Mindy. Contract Law. 4th ed. London: Oxford University Press, 2012. Print. Collins, Hugh. The Law of Contract. 4th ed. Lexis Nexis, 2003. Print. Furmston, Michael. Cheshire, Fifoot & Furmston’s Law of Contract. 16th ed. London: Oxford University Press, 2012. Print. Harlow, Carol. Understanding Tort Law. 3rd ed. London: Sweet & Maxell, 2005. Print. Kumar, Arun. Mercantile Law. New Delhi: Atlantic Publishers and Distributors, 2002. Print. Marson, James. Business Law. 3rd ed. London: Oxford University Press, 2013. Print. McKendrick, Ewan. “Contract: In General.” English Private Law. Ed. Andrew Burrows. New York: Oxford University Press, 2013. 481-612. Print. Miller, Roger, and Jentz, Gayford. Business Law Today: Comprehensive Edition. 8th ed. Cengage Learning, 2010. Print. Mulcahy, Linda. Contract Law in Perspective. 5th ed. Abingdon: Routledge-Cavendish, 2008. Print. Stone, Richard. The Modern Law of Contract. 10th ed. Abingdon: Routledge Publishing, 2013. Print. Street, Thomas Atkins. The History and Theory of English Contract Law. Edward Thompson Company, 1906, Print. Tonapi, Veena Madhav. Textbook on Jurisprudence. New Delhi: Universal Law Publishing, 2010. Print. Tulsian, PC. Business Law. 2nd ed. New Delhi: Tata McGraw-Hill, 2000. Print. Whincup, Michael, H. Contract Law and Practice: The English System with Scottish, Commonwealth, and Continental Comparisons. Alphen: Khrwer Law International, 2006. Print. Read More