Mike’s daughter, Jade, attended North Bank University. The contract between Jade and the University required her to attend 75% of her lectures. Mike was concerned that Jade would not comply with this and so promised her £1,000 if she did so. As a result, Jade attended 75% of her lectures.
In order to fund her studies Jade borrowed £1,000 from her Auntie Tracey. There is a brief written contract which was drawn up by Tracey and which provides for repayment of the full amount in cash by Jade on 30 July. In addition, Jade did some paid part time cleaning work for Ashok. Recently, Ashok promised her £80 extra ‘for all those times that you have stayed late to make sure the work has been completed’.
Jade has since fallen out with Tracey and on 30 July told her that she could only afford to pay her £500 by cheque in full and final settlement of the loan. Tracey reluctantly agreed to this as she needed the money to pay off her credit card bill.
Mike and Ashok have changed their minds about giving Jade the £1,000 and £80 respectively. Tracey has also changed her mind and now wishes to sue Jade for the outstanding £500.
Advise Jade whether Mike, Ashok and Tracey can change their minds either on the basis of intention to create legal relations and/or on the basis of a lack of consideration.
Failure to comply with these instructions may result in work not being marked.
The limit is 1,000 words. Footnotes used only for referencing (not providing extra text) and bibliographies are not counted. Appendices are not permitted.
A word total must be given on course-work submitted. An inaccurate count may be dealt with as an attempt to obtain an unfair advantage.
Any work beyond the word limit will not be marked and will attract no credit.
Coursework must be word-processed, double-spaced and paginated.
Standard referencing guidelines must be followed – these rules are set out in your Law subject resources under the heading Referencing, sub-heading: Official Oscola Guidance.
The assessment seeks to assess the following unit outcomes:
Knowledge and understanding: law relating to consideration and the intention to create legal relations, and its development.
Researching primary resources, academic articles and journals;
Close analysis of judicial reasoning and relation to existing law.
Persuasive and cogent argument.
This assessment seeks to assess the following transferable and practical skills:
ability to analyse a judgement and determine relevant issues;
ability to marshal and communicate an argument;
ability to identify uncertainties and fallacies;
ability to distinguish legally relevant and irrelevant factors;
ability to communicate effectively in writing.
Credit will be awarded for this assessment based on the following criteria:
ability to identify and describe relevant issues;
ability to identify the principles of interpretation that may be an issue;
ability to apply the relevant law to those points that may be an issue;
clarity and structure of argument; reasoned conclusion;
use of source materials;
Candidates may want to have particular regard to the following issues:
The development of the principles of English law in relation to the intention to create legal relations and/or consideration.
Candidates may want to have particular regard to the following useful sources:
Lecture handouts, the latest editions of the contract law textbooks, relevant cases.
Candidates should be aware of these common errors and avoid them:
Lengthy repetition of the facts of any cases.
Lengthy reference to cases without explaining how this develops the argument.
Poor construction of the argument.
Expressing an opinion unsupported by fully referenced sources.
Failing to address the terms of the assignment.
Candidates should be aware of best practice, including in particular the following:
Setting out a roadmap to set the context by identifying the relevant area of contract law and flagging key issues to be considered.
Accurately defining key concepts.
Concisely and clearly constructing an argument.
Effectively using authorities (cases) to support statements.
Making an effective conclusion to encapsulate the position.
Coursework must be submitted in electronic form as a word document through the submission link on the VLE site.
Use your student ID number to identify your work. Do not put your name on your work.
Coursework can be submitted up to two weeks late for a maximum mark of 50%. Coursework submitted more than two weeks after the due date will receive a mark of 0%. This is subject to any established DDS status or Extenuating Circumstances being supported when the true mark merited by the work may be awarded.
The assessment must be the candidate’s own work. All quotations must be credited and referenced. Paraphrasing is still regarded as plagiarism if a candidate fails to acknowledge the source for the ideas expressed. See the University’s policy on academic integrity.
Jade and Mike
Intention to create legal relations is an essential ingredient of a contract.
Parties to a commercial agreement intend to enter into legal relations (Esso v C&E Commission, Edwards v Skyways).
Parties to domestic and family agreements are presumed not to intend legal relations.
Balfour v Balfour – husband and wife agreement in which Lord Atkin laid down the policy reasons behind the presumption. ‘…the small courts of this country would have to be multiplied one hundredfold’
Presumption also extended to parent and child agreements by Jones v Padavatton. Daughter gave up a job in USA and came to England to study for the bar. In return mother promised her rent free accommodation. Mother sought repossession of house while daughter still studying for the bar and daughter’s defence was the ‘contract’ between them. Held, no contract; this was a family agreement not intended to create legal relations.
Mike can change his mind relying on Jones and refuse to give Jade the promised £1,000 on the basis that they did not intend legal relations. The presumption might be rebutted if the context provides otherwise Edmunds v Lawson. Has Jade relied on Mike’s promise by borrowing £1,000 for Tracey?
If Jade can overcome the hurdle of intention does she provide consideration for Mike’s promise?
Definition of consideration – Currie v Misa, Dunlop v Selfridge
Is performance of an existing contractual duty owed by Jade to a third party (the University to attend 75% of her lectures) good consideration to buy Mike’s promise to pay her £1,000 if she attends?
The short answer is yes, based on Shadwell v Shadwell, Scotson v Pegg , NZ Shipping v Satterthwaite and Pao On v Lau You Long.
Jade and Tracey
This deals with the part payment of debts
The common law rule is payment of a lesser sum due is not good consideration and the promisor (Tracey) can go back on her word and sue for the remainder.
This was established in Pinnel’s case and Foakes v Beer
The reasoning is that Jade has given Tracey no consideration to buy Tracey’s promise to accept less.
Note that the Williams v Roffey practical benefits’ type of consideration cannot be extended to promises to pay less. This was rejected in Re Selectmove Can Jade rely on estoppel? Is it inequitable for Tracey to be allowed to go back on her word?
Development and explanation of estoppel in Hughes v Metropolitan Rly and High Trees Case
Conditions and effect of estoppel
Inequitable to allow promisor to go back on word D & C Builders v Rees
Jade and Ashok
This raises an issue of past consideration.
Past consideration should be explained with reference to the cases. Roscorla v Thomas and Re McArdle
The promise for Ashok comes too late and is for consideration which Jade has provided in the past.
Can Jade rely on any of the exceptions?
Requested performance with the assumption that payment would be made for the extra work. Lampleigh v Braithwait and Re Casey’s Patents
The modern requirement for past consideration being good consideration were laid down by Lord Scarman in Pao On v Lau Yiu Lon