Introduction
This essay aims to explore the legal concepts of executory, executed, and past considerations within the context of contract law, a fundamental area of study for law undergraduates. Consideration, defined as something of value exchanged between parties to a contract, is essential for the formation of a legally binding agreement in English law. The essay will first distinguish between the three types of consideration, providing clear definitions and examples to illustrate their differences. Subsequently, it will examine the circumstances under which a contract supported solely by past consideration may still be enforceable, despite the general rule against its validity. By drawing on established case law and legal principles, this discussion seeks to offer a sound understanding of these concepts while acknowledging their practical implications and limitations.
Defining Executory, Executed, and Past Considerations
Consideration in contract law can be classified into three distinct categories: executory, executed, and past. Executory consideration refers to a promise to perform an act in the future. For instance, if Party A promises to deliver goods to Party B next month in exchange for Party B’s promise to pay upon delivery, the consideration is executory as it remains unperformed at the time of the contract’s formation (Beatson et al., 2016). This type of consideration is common in bilateral contracts where obligations are yet to be fulfilled.
Executed consideration, on the other hand, occurs when one party has already performed their part of the bargain at the time the contract is made. A typical example is a unilateral contract, such as a reward offer: if Party A promises £100 for the return of a lost item and Party B returns it, Party B’s act of returning the item constitutes executed consideration (Poole, 2016). Here, one party’s obligation is completed, while the other’s remains executory.
Past consideration, however, involves a promise made in return for an act or benefit that has already been performed before the promise was made. Generally, past consideration is not valid in English law because it lacks the element of bargain at the time the act was performed. For example, if Party A voluntarily helps Party B with a task, and Party B later promises to pay for that help, the consideration is past and typically unenforceable (Treitel, 2015). The landmark case of Roscorla v Thomas (1842) illustrates this principle, where a promise to warrant a horse’s soundness after its sale was deemed unenforceable due to past consideration.
Enforceability of Contracts with Past Consideration
Despite the general rule that past consideration does not support a valid contract, there are specific circumstances under which such contracts may still be enforceable. One notable exception arises when the past act was performed at the promisor’s request, and there was an implied understanding that payment or reward would follow. The case of Lampleigh v Braithwait (1615) established this principle: Braithwait requested Lampleigh to obtain a royal pardon, and after the service was rendered, promised payment. The court held the promise enforceable, as the act was done at Braithwait’s request with an expectation of compensation (Beatson et al., 2016). This exception highlights that a pre-existing relationship or request can validate past consideration.
Furthermore, under Section 27 of the Bills of Exchange Act 1882, past consideration can support a contract in the context of negotiable instruments. If a debt is discharged by a bill of exchange, the past debt is considered valid consideration for the new promise (Treitel, 2015). This statutory exception ensures practical enforceability in commercial transactions, demonstrating the law’s adaptability to specific contexts.
Critical Reflection on Past Consideration
While these exceptions provide flexibility, they also reveal limitations in the application of the past consideration rule. The requirement of a prior request, as in Lampleigh v Braithwait, may exclude many genuine agreements where no explicit request was made. Moreover, the rule often seems overly rigid in modern commercial contexts, where parties may assume obligations based on prior dealings. Some scholars argue that a broader approach, focusing on the intention to create legal relations, might better serve fairness (Poole, 2016). However, the current framework prioritises certainty and the principle of bargain, which remain central to English contract law.
Conclusion
In conclusion, executory, executed, and past considerations represent distinct forms of value exchange in contract law, each with unique implications for enforceability. While executory and executed considerations typically support valid contracts, past consideration is generally deemed invalid unless specific exceptions apply, such as a prior request or statutory provisions like those in the Bills of Exchange Act 1882. These exceptions, though limited, ensure that the law can accommodate certain equitable and commercial needs. Nevertheless, the rigidity of the past consideration rule raises questions about its applicability in evolving contexts, suggesting a need for ongoing evaluation. Understanding these nuances is essential for law students, as they underpin the broader principles of contractual obligations and fairness in legal practice.
References
- Beatson, J., Burrows, A., and Cartwright, J. (2016) Anson’s Law of Contract. 30th edn. Oxford: Oxford University Press.
- Poole, J. (2016) Textbook on Contract Law. 13th edn. Oxford: Oxford University Press.
- Treitel, G. H. (2015) The Law of Contract. 14th edn. London: Sweet & Maxwell.
