"[E]vidence of consideration may be needed more than once in the life of a commercial relationship. Whenever the parties need to vary the terms of the original agreement, they will need to provide fresh consideration as, in the eyes of the traditionalist

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"[E]vidence of consideration may be needed more than once in the life of a commercial relationship.  Whenever the parties need to vary the terms of the original agreement, they will need to provide fresh consideration as, in the eyes of the traditionalists, this is a fresh deal."

L Mulcahy, Contract Law in Perspective, (Routledge, 2008), 85

Traditionally, consideration can be seen as the fundamental factor taken into account when courts determine whether or not a promise is enforceable. The importance of consideration is not only emphasised in formation promises but also in alteration promises.

My aim in this essay is to critically evaluate the circumstance in which the courts will enforce a promise which varies a contract; formally referred to as an alteration promise. A legally binding contract consists of three elements:  offer, acceptance and ‘valid’ consideration.  Consideration can be best described as,
“consisting of either some rights, interest, profit, or benefit accruing to the one party, or some forbearance, detriment, loss or responsibility given, taken, suffered or undertaken by the other”
.

Historically in order for alteration promise(s) to be legally enforceable there is a need for ‘fresh’ consideration to be provided if any of the terms of the original contract are varied. Hence, disputes arising from if an alternative promise can be enforced; the courts will only enforce the promise if  fresh consideration has been provided in response to the alteration. Therefore indicating that Mulcahy’s claim that; “ Whenever the parties need to vary the terms of the original agreement, they will need to provide fresh considerations as, in the eyes of the traditionalists this is a fresh deal”, is indeed true. The three rules of considerations are: consideration must be sufficient, but need not be adequate; consideration must have some economic value and finally, consideration must move from the promisee. However, circumstances have been identified by the courts where they have made exceptions to the general principles of consideration. Furthermore the doctrine of consideration itself has been undermined since the enforcement of the Judicature Acts 1873-75  . As a result of which the courts are able to enforce alteration promises which vary a contract despite no fresh consideration being present. The courts are able to achieve this by incorporating the modern concept of promissory estoppel . This modern principle challenges Mulcahy’s judgement on whether or not ‘fresh consideration’ is essential for the courts to enforce promises that vary a contract.

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 Courts generally follow the principle that ‘past consideration is no consideration’.  It can thus be deemed insufficient if one party carries out a task before the receiving party has promised something in exchange. Clearly indicating that when the party varies the contract and states that they will pay (or give something of value), to the other party this cannot be seen as valid consideration as the receiving party had already received thus, the promise will not be enforced. The ‘past consideration is no consideration’ rule can be seen applied in; Roscorla v Thomas. However circumstances in which the courts will ...

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