Consideration must move from the promise - law of contract, Business Law and Ethics

Consideration must move from the promise - Law of Contract

Conversely the rule that "consideration must move from the promisee" means such only a person who has personally given consideration to a promise can sue for breach to the promise.  Well a person who has not given consideration about a promise cannot sue the promisor with the simple reason such he cannot expect to get something for nothing. Hence the common law regards a contract like a bargain between the parties to a commercial transaction thus each of whom has bought the promise to the other with his own promise or like act. 

Actually this is illustrated through the case of Dunlop v Selfridge in whereas the appellants were motor tyre manufacturers and sold tyres to Messrs Dew & Co. That who were motor accessory dealers.  Hence under the terms of the contract Dew & Co. agreed not to sell the tyres below the Dunlop's list prices, and as the Dunlop's agents, to obtain from other retailers a related undertaking.  Well in return for this undertaking Dew & Co. were to obtain discounts, some of that they could pass on to retailers who bought tyres.  But Selfridge & Co. accepted two orders from customers to Dunlop covers at a lower price.  Whether they obtained the covers through Dew & Co. and signed an agreement just not to sell or offer the tyres below list price. 

Further it was further agreed that by £5 per tyre so sold should be paid to Dunlop through way of liquidated damages.  Through Selfridge's supplied one of the two tyres ordered below list price.  Though they did not actually supply the other, although informed the customer such they could only supply it at list price.  Well the appellants claimed an injunction and damages against the respondents to breach of the agreement completed with Dew & Co., claiming such Dew & Co. were their agents in the matter. Actually it was held that there was no contract made between the parties.  Thus Dunlop could not enforce the contract made between the respondents and Dew & Co. since they had not supplied the consideration.  Smooth if Dunlop were undisclosed principals, such there was no consideration moving between them and the respondents.  Moreover The discount received through Selfridge was part of that given through Dunlop to Dew & Co. since Dew & Co. were not bound to confer any part of their discount for retailers the discount received through Selfridge operated only like consideration between themselves and Dew & Co. and could not be claimed through Dunlop as consideration to support a promise not for sell below list price.

Posted Date: 1/22/2013 3:00:28 AM | Location : United States

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