A gratuitous agreement is one where there are no considerations; these agreements are referred to as such. An unconditional pledge, a nudum pact, or a gratuitous commitment cannot normally be enforced. An agreement that does not include a consideration recognized by the law to have a value connected to it and where such condition flows from the promisor to the promise in exchange for such promise is unenforceable under common law. Promises made in court are frequently disregarded for various reasons, including the absence of any compensation tied to the pledge.
A void agreement is one in which there was no mutual consideration, according to the ruling in Stilk v. Maverick (Stilk v Myrick [1809]). In a different instance of Roscorla v. Thomas (Roscorla v. Thomas [1842]), Roscorla sold Thomas a horse after Thomas had given thought, and Roscorla assured Thomas that the animal was a quiet horse.
Thomas eventually discovered that the horse was not at all well-behaved, and he filed a lawsuit against Roscorla for breach of contract. As the agreement about the horse's conduct was established after the agreement between the two parties regarding the sale of the horse had been finalized, the court concluded that there had not been a legitimate contract between Roscorla and Thomas in this case. As no consideration was tied to this guarantee regarding the horse's conduct, and it was made separately from the sale of the animal, it would be unenforceable.
Application
Given the circumstances, Jane's agreement to give Jack the Lotus Super would be null and void. No consideration has been connected to this pledge. According to the Stilk and Roscorla case rulings, a promise made without consideration is a gratuitous commitment typically not enforceable in court.
Issue
Rules of law
An offer from the offer must have been made for a contract to exist. This offer ought to have been made to establish a legal connection between the offer and the offer in light of the offer that has been made. In addition, a promise must be accompanied and thought to be upheld by a court of law (Treasury.gov.au, 2016). An offer and acceptance may only reach an agreement, and one without remuneration is unenforceable. For there to be a considered quid pro quo, there must be a reciprocal transaction in which one person provides the other with something. According to the court's opinion in R v. Clark (1927), the pledge would not be enforceable because there was no reciprocity between the parties (Fitzpatrick & Symes, 2014).
Application
In the scenario described, Jack has paid a valid consideration for the Lotus Super 7 that has been purchased. As a result, there is an offer, which is accepted and amounts to a binding agreement, and this agreement is enforceable since a financial reward backs it. The connection between the parties is quid pro quo, as stated in the R v. Clarke case (R v. Clark [1927]), and is therefore enforceable.
Issue
Rules of law
Although adequacy is not a requirement for consideration, it must be actual. In light of this, courts are hesitant to rule that a contract is defective because of insufficient consideration unless it is illusory or criminal (Ware, 1989). The courts will not examine whether the consideration was adequate until they are confident that the contract was not bad. The promisor must specify the amount of compensation; the promise cannot make an offer to the promisor and have that amount be considered in the agreement (Lindsay, 2004).
So, even if there is insufficient consideration, if the promisor has stipulated the consideration, there would be no need to analyze this consideration. The consideration must be lawful in character and have worth in the eyes of the law. There is no need for the promise's value to be matched to the consideration (Ryan, 1964).
In the case of Commercial Bank of Australia Ltd v. Amadio (1983), it was decided that while the thought offered should be appropriate, it is not necessary. It is not necessary to be anything other than a notional consideration as long as it is adequate legally. It makes no difference whether the payment is minimal or insignificant. Lord Somervell also said in another Chappell v. Nestle decision (Chappell & Co Ltd v. Nestle Co Ltd [1959]) that even if a peppercorn had been granted as a consideration, the same would be considered a valid consideration. Whether the payment described above was the one, the promisor had agreed to.
The promisor does not need to enjoy pepper and may even request that the corn be thrown away. However, this factor must have some sort of value in the eyes of the law. Only illusory promises will result in the consideration not being regarded as sufficient to meet the promise's condition for enforceability. In the seminal instances of Biotechnology Australia Pty Ltd v. Pace (1988) and Placer Development Ltd v. Government (1969), the court held that illusory consideration is not a good factor (Corbin, 1918).
Application
Even if 2500 has been defined as consideration by the promisor, Jane herself, and even though it is not equal to the market value of the Lotus Super 7, it is a legal consideration since it is valuable in the eyes of the law. If specified by the promisor as described above, the compensation given need not be equal to the promise's worth. The mere existence of a thought suffices; its appropriateness is not crucial. The promise shall be enforceable in a court of law in the case at hand since Jane has offered to sell the Lotus Super 7 for the $2500 price that she has defined. It is unnecessary to establish the sufficiency of such consideration in this instance.
Rules of law
When undue influence has been exerted to force the other party to agree to a change in the agreement, such as when bodily harm, personal safety, or life has been threatened without justification or when undue economic influence has been employed (Monahan & Carr-Gregg, 2007). In that situation, the person from whom the variation had been received may decide to revoke it because it had been gained under duress. In other words, the courts will not impose such modifications even if new consideration was received for the adjustments obtained via coercion.
There was a contract for sale and buy between the parties in the matter of TA Sundell & Sons Pty Ltd. v. Emm Yannoulatis (Overseas) Pty Ltd. (TA Sundell & Sons Pty Ltd. v. Emm Yannoulatis (Overseas) Pty Ltd. [1956]) for the sale and purchase of iron. The vendor was bringing in this iron from France. A letter of credit was used to make the payment, which was necessary. Sellers engaged in product importation typically utilize letters of credit as a specific form of payment.
The seller threatened to withhold the iron unless the buyer agreed to pay a higher price for it since the vendor's costs had increased significantly as a result of the change in the exchange rate. The buyer had little choice but to accept the change since he had engaged in several other contracts that relied on this delivery. Afterward, the buyer filed a lawsuit to demand the return of the extra funds the seller had stolen. The buyer attempted to retrieve the additional payment made to the seller successfully.
As the vendor was already required to offer the buyer iron under the initial contract, there was no legitimate reason for the vendor to extend the credit note; therefore, there was no room for the vendor to charge the buyer extra money to fulfill this condition. Furthermore, the buyer's agreement to the variation had been tainted owing to the seller's demands for additional payment and the refusal to import the material for the transaction if those demands were not met.
Due to the use of pressure to get approval for the variation, the action for the money to be returned was successful since a condition of this kind can be revoked by the person from whom it was obtained under duress.
In addition, the court found that the demand made in the case of Universe Tankships Inc. of Monrovia v. International Transport Workers Federation (Universe Tankships Inc. of Monrovia v. International Transport Workers Federation [1983]) was excessive given the amount that the plaintiff had already paid and the fact that the demand was made in addition to what was originally requested in the contract. The defendant had previously told the plaintiff they would only release the ship if the plaintiffs cared for their needs. As a result, the court held that the plaintiff might nullify the condition since it had been imposed upon them under duress, and any further fees paid above those already being paid to the defendant would be reimbursed.
Application
There was pressure from North Ocean Tankers put on the shipbuilder in the scenario at hand to accept the contract change. Similar to the TA Sundell case, North Ocean Tankers already had to provide for the tanker's work as per the initial contract; hence, nothing further was being provided for the consideration to grow. As in the TA Sunell and Universe Tankship cases, the shipbuilders' threats to stop working invalidated their assent to the additional payment. As a result, the other party can declare such permission for change in the contract null and invalid, returning to the shipbuilder any additional costs he may have already paid.
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