The Origin of the Doctrine

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Introduction Consideration is often defined as “a detriment voluntarily incurred by the promisee… or a benefit conferred on the promisor in exchange for the promise.”1 Whilst the doctrine of consideration does, in some cases, cause parties to experience injustice, sometimes something that the courts fail to resolve, consideration is a crucial element to the formation of a legally binding contract. This paper will not only explain why the High Court should not abolish the requirement for consideration but will also highlight its usefulness in contract formation. Origin of the Doctrine of Consideration The origin of the doctrine of consideration can trace its roots back to the 16th century when it became apparent for English courts to…show more content…
Criticisms of the Doctrine of Consideration Having said that, some scholars argue that consideration, as it is currently defined, should be abolished4 because of the many injustices it causes parties. The abolishment of consideration is dangerous because it defeats a principal objective of contract law, namely that, a party, having secured a contract and having embarked upon performance, would be free to refuse to proceed merely on the grounds that they had underquoted for the task or that it had proven more difficult than expected.5 However, if consideration was instead replaced with another requirement this then would be more acceptable. This is the case in New Zealand whose Supreme Court has abolished the rule established in Williams v Roffey Bros & Nicholls (Contractors) Ltd (1991) where the English Court of Appeal held that the legal duty rule does not apply so long as a party gains a practical benefit from varying the terms of the original contract which constitutes good consideration. In its place the New Zealand Supreme Court has replaced consideration with the requirement that parties intended to be bound by their reciprocal undertakings.6 Whilst this may seem like an acceptable replacement of consideration, it is difficult to determine when parties intend to be bound by their reciprocal undertakings, something that consideration
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