The document summarizes key concepts related to the formation of a valid construction contract, including:
1) Offers must be definite, unambiguous and communicated to the offeree. Invitations to treat and invitations to tender are not offers.
2) Acceptance must be unconditional, definite and communicated to the offeror to form a valid contract.
3) Consideration and intention to create legal obligations are required.
4) Only parties to a contract (privity of contract) can enforce it or be bound by its terms. Subcontractors generally lack privity with main contractors or employers.
This document summarizes presentations from an Eversheds Food and Drink Sector Seminar on managing redundancies and changing operational spaces.
The first presentation discusses managing redundancies, including selection criteria, consultation requirements, alternative employment, and agency workers. It also addresses property issues like selling or getting out of leases and residual liabilities.
The second presentation focuses on managing health and safety in a proactive manner through establishing a safety management system with core elements of planning, implementing, checking performance, and reviewing lessons learned. It discusses reasonable practicability and pitfalls to avoid like inadequate policies and a culture of not following procedures.
The objectives of this seminar were to:-
Enable project professionals to reach contract close quicker with a superior contract in place.
Assist project professionals to interpret and manage contracts with more vigour.
De-mystify legal terminology.
Enable project professionals to brief and constructively challenge their lawyers.
20080704 innovative approach in contracts and tender procurement managementraymond_wan2005
This presentation discusses innovative approaches to contract and tender procurement management. It outlines different types of contract procurement like design-build and discusses why the design-build approach may be suitable for certain projects. A case study is presented to illustrate how design-build procurement could be applied. The presentation concludes with a question and answer session.
The document discusses key aspects of the offer phase in contract formation. It defines an offer as a manifestation of willingness to enter a bargain that invites acceptance. An offeror makes an offer while an offeree receives it. Acceptance of the offer by the offeree forms a contract that is binding on the offeror. For the offer to be valid, it must include the offeror's promise, consideration for the promise, and be intended to induce acceptance or performance from the offeree. Advertisements and auctions may constitute offers depending on the specificity of their terms.
The Indian Contract Act of 1872 establishes the general principles of contract law in India. It applies to all of India except Jammu and Kashmir. The Act recognizes several types of contracts based on how they are formed (oral, written, implied) and how enforceable they are (valid, void, voidable, illegal). A valid contract requires offer and acceptance, lawful consideration, capacity and consent of parties, a lawful object, and compliance with any other requirements under Indian law. Contracts can also be classified as executory, executed, bilateral, unilateral, or tacit. The Act also establishes rules around offers, acceptances, and formal contracts such as those under seal.
This document provides an overview of the real estate services offered by Tamara Inzunza to buyer clients. It outlines her role in explaining agency relationships, transaction costs, mortgages, and assisting buyers throughout the home buying process including contract negotiations, inspections, contingencies and closing. The document also covers why pre-approval is important, an explanation of common transaction costs, the home buying process after an offer is made, home inspections, association documents, home warranties, foreclosures and short sales, the pre-settlement walk through, and closing.
This document summarizes presentations from an Eversheds Food and Drink Sector Seminar on managing redundancies and changing operational spaces.
The first presentation discusses managing redundancies, including selection criteria, consultation requirements, alternative employment, and agency workers. It also addresses property issues like selling or getting out of leases and residual liabilities.
The second presentation focuses on managing health and safety in a proactive manner through establishing a safety management system with core elements of planning, implementing, checking performance, and reviewing lessons learned. It discusses reasonable practicability and pitfalls to avoid like inadequate policies and a culture of not following procedures.
The objectives of this seminar were to:-
Enable project professionals to reach contract close quicker with a superior contract in place.
Assist project professionals to interpret and manage contracts with more vigour.
De-mystify legal terminology.
Enable project professionals to brief and constructively challenge their lawyers.
20080704 innovative approach in contracts and tender procurement managementraymond_wan2005
This presentation discusses innovative approaches to contract and tender procurement management. It outlines different types of contract procurement like design-build and discusses why the design-build approach may be suitable for certain projects. A case study is presented to illustrate how design-build procurement could be applied. The presentation concludes with a question and answer session.
The document discusses key aspects of the offer phase in contract formation. It defines an offer as a manifestation of willingness to enter a bargain that invites acceptance. An offeror makes an offer while an offeree receives it. Acceptance of the offer by the offeree forms a contract that is binding on the offeror. For the offer to be valid, it must include the offeror's promise, consideration for the promise, and be intended to induce acceptance or performance from the offeree. Advertisements and auctions may constitute offers depending on the specificity of their terms.
The Indian Contract Act of 1872 establishes the general principles of contract law in India. It applies to all of India except Jammu and Kashmir. The Act recognizes several types of contracts based on how they are formed (oral, written, implied) and how enforceable they are (valid, void, voidable, illegal). A valid contract requires offer and acceptance, lawful consideration, capacity and consent of parties, a lawful object, and compliance with any other requirements under Indian law. Contracts can also be classified as executory, executed, bilateral, unilateral, or tacit. The Act also establishes rules around offers, acceptances, and formal contracts such as those under seal.
This document provides an overview of the real estate services offered by Tamara Inzunza to buyer clients. It outlines her role in explaining agency relationships, transaction costs, mortgages, and assisting buyers throughout the home buying process including contract negotiations, inspections, contingencies and closing. The document also covers why pre-approval is important, an explanation of common transaction costs, the home buying process after an offer is made, home inspections, association documents, home warranties, foreclosures and short sales, the pre-settlement walk through, and closing.
This document discusses the performance and discharge of contracts under business law. It defines performance of a contract as when both parties fulfill their legal obligations under the agreement. There are two types of performance: actual performance by the promisor when they deliver as promised, and tender, which is when the promisor offers performance but the promisee refuses acceptance. A contract can be discharged through mutual consent, impossibility of performance, breach, or according to terms of the contract. Remedies for breach include suits for damages, injunctions, specific performance, or rescission of the contract.
This document discusses the performance and discharge of contracts under business law. It defines performance of a contract as when both parties fulfill their legal obligations under the agreement. There are two types of performance: actual performance by the promisor when they deliver as promised, and tender, which is when the promisor offers performance but the promisee refuses acceptance. A contract can be discharged through mutual consent, impossibility of performance, breach of contract terms, or other methods. Remedies for breach include suits for damages, injunctions, specific performance orders, or rescission of the agreement.
This document provides an overview and summary of key concepts related to contracts, including essential elements of a contract, express vs implied contracts, damages and remedies for breach of contract, offer and acceptance requirements, and factors that can impact the enforceability of a contract such as mistakes, fraud, undue influence and duress. Some of the main points covered include defining mutual assent, consideration, liquidated vs unliquidated debts in the context of settlements, and the requirements for an offer to be considered irrevocable or a communication to be considered a counteroffer.
The document discusses tendering, contracts, and execution. It defines key concepts like proposals, promises, consideration, agreement, void agreements, communication of offers and acceptances, and revocation. It provides examples to illustrate these concepts. It emphasizes that for a valid contract, there must be an offer, acceptance of the offer, and communication of acceptance. It also notes that acceptance must be absolute and unqualified, and discusses partial acceptance.
In these PowerPoint slides Dr Duncan Webb covers the three elements of the claims settlement process. This is a great, high level overview, of managed repairs, cash settlements. Duncan also touches on full and final (discharge of claim).
The document provides information about letters of intent (LOIs), including what they are, their purpose, essential elements, and types (binding vs non-binding). It notes that LOIs allow parties to preliminarily outline key deal terms to guide later negotiations and contract drafting. Essential elements that should be included are the transaction details, property identification, price, conditions, timelines, and other standard terms like commissions. Parties are also generally obligated to negotiate further agreements in good faith after signing a non-binding LOI.
Law the negotiable instruments act 1881Adil Shaikh
The document summarizes key aspects of negotiable instruments under the Negotiable Instruments Act 1881 including promissory notes, bills of exchange, and cheques. It defines each instrument, outlines their essential elements and characteristics, and distinguishes between them. The key takeaways are that negotiable instruments must be freely transferable, give the holder clear title, and can be transferred indefinitely until maturity.
The document outlines the conveyancing process for buyers purchasing a property in Australia. It explains that a solicitor or conveyancer will handle the conveyancing process, which includes obtaining quotes, property searches, arranging financing if needed, signing contracts, exchanging contracts, and completion of the purchase. The process involves local authority and property searches, corresponding with the seller's solicitor, ensuring insurance is in place, and agreeing on an exchange and completion date when ownership of the property is transferred.
The document discusses negotiable instruments such as promissory notes, bills of exchange, and cheques. It defines these instruments, outlines their essential characteristics, and provides examples. It also discusses key concepts related to negotiable instruments including endorsements, holders, holders in due course, and ways parties can be discharged from their obligations on the instruments.
1. Commercial paper includes negotiable instruments like notes and drafts that can be transferred between parties.
2. Notes involve a maker promising to pay a payee, while drafts involve a drawer ordering a drawee (usually a bank) to pay a payee.
3. A holder in due course takes the instrument free from personal defenses and claims and can enforce payment from parties like the maker or drawer.
This document discusses key contractual terms, including:
1) Express terms must be incorporated in writing to form part of the contract. Oral statements not formally included do not vary the written terms.
2) Implied terms may be included where the contract is silent on an important matter as determined by law or the parties' conduct.
3) Parol evidence can be used to establish whether the contract is operative or if collateral oral contracts were formed related to but not varying the written terms.
This document outlines the legal rules regarding a valid acceptance in contract law. It discusses that acceptance must come from the person the offer was made to, must be absolute and unqualified, and must be communicated to the offeror. It also notes that acceptance must be within a reasonable time period and before the offer is revoked, must follow the offer, and rejected offers require renewal to be accepted. The document concludes by explaining the communication requirements for offers, acceptances, and revocations under contract law sections 4 and 5.
The document summarizes key concepts around offers in contract law:
1) An offer requires intent to enter a binding agreement, definite terms, and communication to the offeree.
2) Advertisements are generally invitations to negotiate rather than offers, but rewards are treated as unilateral contract offers that can be accepted with performance.
3) Offers can be terminated by revocation before acceptance, rejection, lapse of time, or subsequent illegality under common law, though the UCC provides more flexibility.
The document discusses different types of contract performance:
1) Actual performance occurs when all parties fulfill their obligations under the contract.
2) Substantial performance applies when a contract is nearly complete, except for minor defects, and the court orders payment with deductions.
3) Partial performance happens when one party has partially, but not fully, performed and the other accepts this.
4) Attempted performance, or tender, is when a party offers to perform as required, even if the other party refuses, discharging the performing party's liability.
Acceptance in Contract and its CommunicationPreeti Sikder
Learning Objectives:
Students will :
a) learn the legal definition of acceptance and general rule of communication.
b) be able to distinguish between Bangladeshi and English law relating to acceptance
Introduction to Offer and Invitation to Treat Preeti Sikder
After completion of this lesson, students will be able to:
a) define offer and invitation to treat
b) distinguish between the judgments provided in Gibson and Storer Case
The document provides an overview of the Contract Act 1872 in Pakistan with the following key points:
1. It defines agreement, contract, and the essential elements of a valid contract.
2. It classifies contracts based on their creation, execution, and enforceability.
3. It describes the various ways a contract can be discharged, including through performance, mutual agreement or consent, impossibility of performance, and breach.
The document discusses the Islamic financing structure of Istisna. It defines Istisna as a sale transaction where the commodity is transacted before coming into existence, through an order placed on a manufacturer. It outlines the key components of an Istisna contract including subject matter, price, delivery terms, security provisions and termination conditions. Various models of Istisna used in project financing, house financing and working capital financing are presented. Risk management aspects and comparisons with conventional loans are also highlighted.
Not everyone enjoys negotiating or haggling. But done correctly, it can help you build strong supplier relationships and get you the best deals for you business. For expert advice on how to hone your skills, view our free guide here.
This document provides an overview of contract law, defining a contract and outlining the basic elements required for any contract to be valid. It discusses the requirements of mutual assent (offer and acceptance), consideration, legality, and capacity. It also describes different types of contracts, including unilateral and bilateral, executory and executed, void and voidable. Technical contracts like negotiable instruments are also mentioned. The key elements that must be present in any legally binding contract are an offer, acceptance, consideration, capacity of the parties, and a legal purpose.
More Related Content
Similar to 20090820 Construction Lifecycle's beginning
This document discusses the performance and discharge of contracts under business law. It defines performance of a contract as when both parties fulfill their legal obligations under the agreement. There are two types of performance: actual performance by the promisor when they deliver as promised, and tender, which is when the promisor offers performance but the promisee refuses acceptance. A contract can be discharged through mutual consent, impossibility of performance, breach, or according to terms of the contract. Remedies for breach include suits for damages, injunctions, specific performance, or rescission of the contract.
This document discusses the performance and discharge of contracts under business law. It defines performance of a contract as when both parties fulfill their legal obligations under the agreement. There are two types of performance: actual performance by the promisor when they deliver as promised, and tender, which is when the promisor offers performance but the promisee refuses acceptance. A contract can be discharged through mutual consent, impossibility of performance, breach of contract terms, or other methods. Remedies for breach include suits for damages, injunctions, specific performance orders, or rescission of the agreement.
This document provides an overview and summary of key concepts related to contracts, including essential elements of a contract, express vs implied contracts, damages and remedies for breach of contract, offer and acceptance requirements, and factors that can impact the enforceability of a contract such as mistakes, fraud, undue influence and duress. Some of the main points covered include defining mutual assent, consideration, liquidated vs unliquidated debts in the context of settlements, and the requirements for an offer to be considered irrevocable or a communication to be considered a counteroffer.
The document discusses tendering, contracts, and execution. It defines key concepts like proposals, promises, consideration, agreement, void agreements, communication of offers and acceptances, and revocation. It provides examples to illustrate these concepts. It emphasizes that for a valid contract, there must be an offer, acceptance of the offer, and communication of acceptance. It also notes that acceptance must be absolute and unqualified, and discusses partial acceptance.
In these PowerPoint slides Dr Duncan Webb covers the three elements of the claims settlement process. This is a great, high level overview, of managed repairs, cash settlements. Duncan also touches on full and final (discharge of claim).
The document provides information about letters of intent (LOIs), including what they are, their purpose, essential elements, and types (binding vs non-binding). It notes that LOIs allow parties to preliminarily outline key deal terms to guide later negotiations and contract drafting. Essential elements that should be included are the transaction details, property identification, price, conditions, timelines, and other standard terms like commissions. Parties are also generally obligated to negotiate further agreements in good faith after signing a non-binding LOI.
Law the negotiable instruments act 1881Adil Shaikh
The document summarizes key aspects of negotiable instruments under the Negotiable Instruments Act 1881 including promissory notes, bills of exchange, and cheques. It defines each instrument, outlines their essential elements and characteristics, and distinguishes between them. The key takeaways are that negotiable instruments must be freely transferable, give the holder clear title, and can be transferred indefinitely until maturity.
The document outlines the conveyancing process for buyers purchasing a property in Australia. It explains that a solicitor or conveyancer will handle the conveyancing process, which includes obtaining quotes, property searches, arranging financing if needed, signing contracts, exchanging contracts, and completion of the purchase. The process involves local authority and property searches, corresponding with the seller's solicitor, ensuring insurance is in place, and agreeing on an exchange and completion date when ownership of the property is transferred.
The document discusses negotiable instruments such as promissory notes, bills of exchange, and cheques. It defines these instruments, outlines their essential characteristics, and provides examples. It also discusses key concepts related to negotiable instruments including endorsements, holders, holders in due course, and ways parties can be discharged from their obligations on the instruments.
1. Commercial paper includes negotiable instruments like notes and drafts that can be transferred between parties.
2. Notes involve a maker promising to pay a payee, while drafts involve a drawer ordering a drawee (usually a bank) to pay a payee.
3. A holder in due course takes the instrument free from personal defenses and claims and can enforce payment from parties like the maker or drawer.
This document discusses key contractual terms, including:
1) Express terms must be incorporated in writing to form part of the contract. Oral statements not formally included do not vary the written terms.
2) Implied terms may be included where the contract is silent on an important matter as determined by law or the parties' conduct.
3) Parol evidence can be used to establish whether the contract is operative or if collateral oral contracts were formed related to but not varying the written terms.
This document outlines the legal rules regarding a valid acceptance in contract law. It discusses that acceptance must come from the person the offer was made to, must be absolute and unqualified, and must be communicated to the offeror. It also notes that acceptance must be within a reasonable time period and before the offer is revoked, must follow the offer, and rejected offers require renewal to be accepted. The document concludes by explaining the communication requirements for offers, acceptances, and revocations under contract law sections 4 and 5.
The document summarizes key concepts around offers in contract law:
1) An offer requires intent to enter a binding agreement, definite terms, and communication to the offeree.
2) Advertisements are generally invitations to negotiate rather than offers, but rewards are treated as unilateral contract offers that can be accepted with performance.
3) Offers can be terminated by revocation before acceptance, rejection, lapse of time, or subsequent illegality under common law, though the UCC provides more flexibility.
The document discusses different types of contract performance:
1) Actual performance occurs when all parties fulfill their obligations under the contract.
2) Substantial performance applies when a contract is nearly complete, except for minor defects, and the court orders payment with deductions.
3) Partial performance happens when one party has partially, but not fully, performed and the other accepts this.
4) Attempted performance, or tender, is when a party offers to perform as required, even if the other party refuses, discharging the performing party's liability.
Acceptance in Contract and its CommunicationPreeti Sikder
Learning Objectives:
Students will :
a) learn the legal definition of acceptance and general rule of communication.
b) be able to distinguish between Bangladeshi and English law relating to acceptance
Introduction to Offer and Invitation to Treat Preeti Sikder
After completion of this lesson, students will be able to:
a) define offer and invitation to treat
b) distinguish between the judgments provided in Gibson and Storer Case
The document provides an overview of the Contract Act 1872 in Pakistan with the following key points:
1. It defines agreement, contract, and the essential elements of a valid contract.
2. It classifies contracts based on their creation, execution, and enforceability.
3. It describes the various ways a contract can be discharged, including through performance, mutual agreement or consent, impossibility of performance, and breach.
The document discusses the Islamic financing structure of Istisna. It defines Istisna as a sale transaction where the commodity is transacted before coming into existence, through an order placed on a manufacturer. It outlines the key components of an Istisna contract including subject matter, price, delivery terms, security provisions and termination conditions. Various models of Istisna used in project financing, house financing and working capital financing are presented. Risk management aspects and comparisons with conventional loans are also highlighted.
Not everyone enjoys negotiating or haggling. But done correctly, it can help you build strong supplier relationships and get you the best deals for you business. For expert advice on how to hone your skills, view our free guide here.
This document provides an overview of contract law, defining a contract and outlining the basic elements required for any contract to be valid. It discusses the requirements of mutual assent (offer and acceptance), consideration, legality, and capacity. It also describes different types of contracts, including unilateral and bilateral, executory and executed, void and voidable. Technical contracts like negotiable instruments are also mentioned. The key elements that must be present in any legally binding contract are an offer, acceptance, consideration, capacity of the parties, and a legal purpose.
Similar to 20090820 Construction Lifecycle's beginning (20)
1. Construction life-cycle’s beginning phase –
How to ensure we have a construction
contract
Presented by Steven Yip/James Yeung
Minter Ellison Lawyers
20 August 2009
HK_835508_1
Topics Offer
• Formation of a construction contract • Expression of willingness to contract on certain
terms, made with the intention that it shall
• Offer
become binding as soon as it is accepted by the
• Acceptance offeree.
• Intention • Definite and unambiguous
• Consideration • Communication of offer to the offeree (eg. Letter,
• Privity of Contract fax, newspaper, email, conduct etc.)
• Can be withdrawn before acceptance
Harvey v Facey [1983]
Offer v Invitation to Treat
Harvey: “Will you sell us Bumper Hall pen? Telegraph
•Invitation to treat is an indication of willingness to lowest price.”
negotiate a contract Facey: “Lowest cash price for Bumper Hall pen £900.”
•Not an offer Harvey: “We agree to buy Bumper Hall pen for the £900
asked by you.”
•Objective test
Held by Privy Council: No contract. Facey’s telegraph
•Example: Display Goods only amounts to a statement of
Invitation to Tender price. Offer to buy the pen was
made by Harvey’s 2nd telegram.
1
2. Invitation to Tender Tender
• May amount to an offer
• Not an offer binding the employer to accept the
lowest tender UNLESS express the wordings are • Normally stipulates a time within which the
clear to turn the invitation to tender into an offer, tender is to remain valid
eg. lowest tender made • If time is not stipulated, reasonable time to
accept is to be implied
• Costs of tender
Acceptance Acceptance
• A final and unqualified expression of assent to the • Meeting of minds/Concurrence of will?
terms of an offer
• Objective test
• Definite and unambiguous
• Can only be accepted by the offeree
• Must be unconditional
• Silence cannot be construed as acceptance
• Must be communicated to offeror
Conditional Acceptance Certainty of Terms
• Not an acceptance
• Reasonable degree of certainty
• Amount to counter-offer
• Approach sensibly and reasonably
• No contract is formed until acceptance of counter-
• Custom and trade usage
offer
• Commercial reality
• ‘Mirror image rule’ → acceptance in its
entirety • Implied terms
2
3. Common Implied Terms of Contract Required of Common Implied Terms of Contract Required of
Employer Employer
• The employer to do all that is necessary on his • The employer would not hinder or prevent
part to bring about completion of the contract contractor from carrying out the contract works
eg: in a regular and orderly manner and in
accordance with the terms of the contract
• give possession of site within reasonable time
• obtain planning permission or building regulation • Instructions should be given to the contractor at
consent in sufficient time to enable the contractor such time and in such manner so as not to
to proceed without delay hinder or prevent the contractor from performing
his duties under the contract
‘Back to Back’ Contract ‘Pay when paid’ clause
• Usually in sub-contracts • ‘In the absence of any clear express words to the
contrary, those clauses merely provide for the
• Incorporating main contract terms into sub- time of payment and that the right to be paid is
contract not dependent upon the party getting paid first?
• Difficulty to ascertain extent of incorporation • Very high standard for those clauses to be held
• Eg. Scope of work, payment terms to be valid
• ‘Pay if paid’ is usually not enforceable
Contract Price Intention
• Original contract price will invariably change • Intention to create legal relations between
themselves
• Variations, missing items etc.
• Objective test – how reasonable persons would
• Implied promise on the Employer to pay for the perceive the words, conduct and circumstances
work/services on basis of reasonable charge (ie.
• If reasonable persons would assume that there was
quantum meruit)
no intention to create legal relation → no contract
• Mechanism by which the price for the particular • Presumption that an intention to create legal
works or services to be rendered can be relationship exists in commercial context
determined
• Presumption that NO intention to create legal
relationship exists in social or family arrangements
3
4. Cable & Wireless (Hong Kong) Ltd Staff
Association v Hong Kong Telecom Intention
International Ltd [2001]
• The Court held that • Family arrangements
• Look at the terms of the agreement itself • Balfour v Balfour [1919]
• If the terms show intention to create legal • Merritt v Merritt [1970]
relationship → Contract
• Letters of Intent
• If the terms do not provide a clear answer, the
Court would look at all the surrounding
circumstances
• Surrounding circumstances include background of
entering into the agreement, relationships of parties,
nature of the agreement etc
Consideration Types of Consideration
• Consideration is generally expressed as follows:
Consideration must be executory or executed
• ‘Consideration may be found in an exchange of
• Executory – Promise to do something in the future
mutual promises or in an exchange of a promise
is given for another promise to be done in the
for an act or forbearance’
future
• Consideration is important because • Example: Buying a house
• Make it an enforceable contract • Executed – When a promise is actually executed, in
• The law will not enforce gratuitous promise (eg. exchange for another promise to be executed in
gift) the future.
• Only the person who provides consideration can • Example: Finding a dog.
enforce
Rules of Consideration Referable to the Promise
• Consideration must be referable to the promise
• Consideration must move from the promisee • Some kind of connection between the promise
• Consideration must be sufficient, but need not be and the consideration
adequate • Inducement to enter into the promise
• Consideration must be current
• Performance of an existing obligation is not enough
• Performance of public law duty is not consideration
• Performance of a contractual obligation owed to a
third party is good consideration
4
5. Move from the Promisee Sufficient, not Adequate
• But not necessarily to the Promisor • Capable of expression in economic terms
• Example: A promised to pay B $1000 if B clean C’s • Some legal value in the eyes of the law
car.
• No need to be adequate
• Nominal value can be sufficient consideration
• Example: $1 to buy a car
Ho Yuk Chu v Shun Hing Refrigerator Air-
White v Bluett (1853)
Conditioning Engineering [2001]
• The procurement of an award of air-conditioning • Cessation of complaints are not sufficient
contract by way of introduction, recommendation consideration
and assistance in preparation of tender was • No economic value
found to be valid consideration to support an
agreement to pay 7% of the contract sums • No contract was formed
Current, not Past Current, not Past
• Past consideration is not good consideration • Eastwood v Kenyon (1840)
• Consideration that was provided before the • Roscorla v Thomas (1842)
promise was made = past consideration
• Exceptions in Pau On v Lau Yiu Long
• Requires an exchange of current (1980)(Privy Council)
promises/consideration at the time of the
• The consideration was at the request of the
contract Promisor
• Common understanding that the promisee will be
rewarded for the performance
• Consideration is legally enforceable
5
6. Not Existing Obligation Williams v Roffey Bros & Nicholls
• Performance of existing contractual duty is not • Exception
good consideration • Roffey sub-contracted the carpentry work to Williams
• Stilk v Myrick (1809) • Roffey doubted that Williams would perform his
obligation under the contract
• Exceptions in William v Roffey Bros & Nicholls • Roffey promised to pay Williams an extra amount in
[1991] return (consideration) for a promise that Williams would
fulfill his obligation under the contract
• Will the promisor gain an advantage arising out
of the continuing relationship with the promisee? • As a result, Roffey obtained a benefit or avoided a
detriment
• Example: Risk of Liquidated Damages • Roffey did not make the promise to pay more under
duress form Roffey
UBC (Construction) Limited v Sung Foo Kee Not Public Law Duty
Limited [1993]
• Performance of a public law duty is not good
• In such circumstances that they were clearly consideration
incentives to both the main contractor and
subcontractor to make a further arrangement in • Promisee required to carry out the statutory duty
order to relieve the subcontractor of its financial anyway
difficulties and also to ensure that the • Collins v Godefroy (1831)
subcontractor was in a position or was willing to
continue with the subcontract works to a • Subpoena
reasonable and timely completion
Partial Satisfaction of Existing Liability Settlement Agreement
• Generally not a good consideration • Usually partial satisfaction of debt
• Exceptions • How to get around the ‘lack of good
consideration’ hurdle?
• Changes to the original arrangement (eg. place,
mode or time of repayment) to the convenience of
the creditor
• Settlement Agreement?
6
7. Overcoming a Lack of Consideration Privity of Contract
• Nominal Consideration
• Example: $1 to settle claims • Only the parties to a contract are bound by it
and entitled to sue on it
• Evidence of consideration
• A third party cannot enforce a promise made in
• By Deed
a contract for its benefit if it is not party to the
• No need for consideration in a deed contract
• Deed of Settlement
• Gratuitous assurance made without consideration
is enforceable
Construction Contracts
Privity of Contract (Cond’t)
Employer
Privity of contract
• Relationship between privity and consideration: No privity of
Main Contractor
• some say consideration and privity are flip sides of the same contract
Privity of contract
coin
• some say consideration and privity are distinct and separate Sub-Contractor
principles
• A sub-contractor cannot sue the employer on the main
• Law in Hong Kong is clear: ‘only a person who is
contract obligations in relation to payment for the
a party to a contract can sue on it’ (see Dunlop
works
Pneumatic Tyre Co Ltd endorsed in B+B
Construction) (See Morison, Son & Jones (Hong Kong) Ltd v Yiu
Wing Construction Co Ltd [1989] and Shui On
Construction Co Ltd v Moon Yik Co [1987])
Insurance Contract
Main Contractor
Privity of contract No privity of contract
Sub-Contractor Insurer
Privity of contract
• The Main Contractor cannot enjoy privity of contract
with the subcontractor’s insurers and cannot claim
under the insurance policy (see Otis Elevator
Company (HK) Limited v Wide Project Engineering &
Construction Company Limited [1985])
7