Past consideration refers to a situation in which one party promises to do something for another party in exchange for something that the second party has done in the past. In contract law, past consideration is generally not considered to be valid consideration because it does not involve a mutual exchange.
One classic example of past consideration in contract law is illustrated in the case of Re McArdle (1951). In this case, a brother and sister inherited a house from their deceased parents. The sister agreed to pay for some repairs and renovations to the house, and the brother promised to pay her a lump sum of money once the work was completed. However, after the work was finished, the brother refused to pay the money, claiming that there was no valid contract between them.
The court ultimately ruled in favor of the sister, finding that there was a valid contract in place due to the sister`s work on the house. However, the court also noted that the brother`s promise to pay the money was not supported by valid consideration, as the sister had already done the work and there was no mutual exchange between the parties.
This case highlights the importance of ensuring that contracts involve mutual exchange and valid consideration. In order for a contract to be enforceable, both parties must agree to exchange something of value. Past consideration, or promises made in exchange for something that has already been done, is generally not considered valid under contract law.
In summary, the example of past consideration in contract law highlights the importance of ensuring that contracts involve mutual exchange and valid consideration. Parties must agree to exchange something of value in order for a contract to be enforceable, and promises made in exchange for past actions are generally not considered valid. As a professional, it is important to understand these principles in order to accurately and effectively communicate information about contract law.
