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(1) Whether Shelly action is that of consideration or past consideration Re: Charlie and Sam.
(2) Whether Shelly consideration is executory or executed.
(3) Whether Charlie performance of an existing duty as consideration is defined as a duty
imposed by contract or duty imposed by general law.
(4) Whether Sam performance of an existing duty as consideration is defined as a duty
imposed by contract or duty imposed by general law.
(5) Whether Shelly part payment of the debt is satisfactory.
(6) Whether they are any remedies available to Shelly.
The first issue to be considered is whether Shelly action is that of consideration or past
consideration Re: Charlie and Sam.
It is important, at this time, to discuss what consideration and past consideration is.
Consideration is described simply as the price for which the promise of the other person is
bought. In Currie v. Misa (1875), it was stated that consideration may consist of either a
right, interest, position, benefit accruing to one party or some forbearance, detriment, loss or
responsibility given suffered or undertaken by the other. Past consideration is confined to the
general rule, that is, past consideration is no consideration. In Roscorla v. Thomas (1842), the
defendant sold a horse to the plaintiff, after the sale defendant promised the plaintiff the horse
was free of defects. It was discovered this was untrue. Held that the recent undertaking was
after the sale and therefore past consideration. In the case of Shelly consideration was given
for both parties in the sum of 200.00 and 100.00 respectively. Past consideration is therefore
not applicable.
The fifth issue to be considered is whether Shelly part payment of the debt is satisfactory.
Pinnels Case (1602) is probably the earliest to establish the principle that if one person owes
money to another, then an agreement to take a lesser sum to settle the debt, if well-attested, is
not a binding obligation. The reason it is not, rests on the fact that there is no new
consideration to support the new agreement. In Pinnels Case (1602), Cole owed Pinnel 8
10s, but at Pinnel's request paid 5 2s 6d one month before the full sum was due. Cole
claimed that there was an agreement that the part-payment would discharge the full debt. The
court found in favour of Pinnel, because part-payment of an original debt did not make for
fresh consideration. Therefore the agreement was not a contract. Shelly by only making a part
payment could be liable for the balance as there was no new consideration agreed to by the
parties.
The sixth issue to be considered is whether they are any remedies available to Shelly.
Shelly would be advised not to pay Sam, success would depend on the fact that Sam
performance of an existing duty as consideration is defined as a duty imposed by contract and
he was therefore obligated to perform that consideration. Pinnels Case (1602) however
commits her settling the debt as it qualifies as only part payment.