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CONSIDERATION
Definition
S 2(d) when at the promisors desire, the
promisee or any person has done or
abstained from doing or does or abstains
from doing.
Price you pay for a price.

From Whom?
S 2(d) promisee or any person
Consideration from promisee or third
party.

 ELEMENTS OF CONSIDERATION
Must be at promisors desire
Can move from promisee or 3rd party - S
2(d) promisee or any person
Can be something done or abstained (past)
Can be something which is being done or
abstained (past)
Can be a promise to do or abstain form
(future)
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Types of Consideration
(i) executory consideration
One promise is made in return for another.
Eg: X agrees to sell Y a motor-cycle & Y
promises to pay RM2000 for it.
Illus (a), S24 CA.

 (ii) executed consideration

A promise made in return for the
performance of an act.
Eg: X offers RM100 to anyone who finds
& return his camera which he has earlier
lost. Y finds & return the camera. Ys
consideration for Xs promise is executed,
the only Xs liability remain outstanding.

 (iii) past consideration

A promise is made in subsequent to & in
return for an act that has already been
performed the promise is made on
account of a past consideration.
Eg: Eg: if Y finds & returns Xs camera &
in gratitude, X promises to reward him
with RM100, the promise is made in return
for a prior act.
Eng Law insufficient to support a
contract.
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Public duty imposed on offeree

ISSUE legal duty performed by someone
consideration?
CASE: COLLINS V GODEFROY (1831)
1 B & AD 950
Facts: Ptf was served with subpoena to
attend ct as a witness to defs trial.
Def promised to pay certain amount to ptf if
he attend.
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Held: Defs undertaking to pay ptf to

appear in ct after he was served with
subpoena is no consideration as ptf is
legally compelled to attend ct.

CASE: GLASSBROOK BROS LTD V

GLARMORGAN COUNTY COUNCIL
[1925].
Facts: Police officers claimed payment of
2200 sterling promised by Co for their extra
services during strike.
Ct: Police officers were entitled to their
claim as they had rendered extra services
than required by law.
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ADEQUACY OF CONSIDERATION
Consideration need not be adequate.
Explanation 2 S 26 an agreement to
which the consent of the promisor is freely
given is not void merely because the
consideration is inadequate.
Illus (f) S 26 A agrees to sell a horse
worth RM1000 for RM10. As consent to
the agreement was freely given. The
agreement is a contract notwithstanding the
inadequacy of consideration.
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 Contract Act: agreement is free in the

absence of such elements as coercion,
undue influence, fraud, misrepresentation &
mistake.

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CASE: PHANG SWEE KIM V. BEH I

HOCK [1964]
Respondent agreed to transfer to app a
parcel of land on payment of RM500,
although the land was worth much more.
Res later refused to honor the promise,
contending that the promise was
unenforceable.
Ct: as long as there was consideration,
inadequacy
of
consideration
was
immaterial.
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AGREEMENT WITHOUT
CONSIDERATION
Gen.
Prin

agreement
consideration is void.
Exception S 26 4 situations:

without

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 1st exception
S 26(a) an agreement made without
consideration is not void where:
(i) it is expressed in writing;
(ii) registered under any relevant applicable
law;
(iii) it is made on account of natural love &
affection between parties standing in near
relation to each other.
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 Illust (b) S 26: What constitute near relation can vary

with each social group, depending on
customs & social organization.

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 CASE: RE TAN SOH SIM [1951]

Facts: The deceased, TSS, expressed a wish that
her estate should be divided amongst the 2
adopted sons & 2 adopted daughters.
Ct: relationship & near must be applied &
interpreted in each case according to the mores of
the group to which the parties belong & with
regard to the circumstances of the family
concerned.
Held: Chinese adopted son is related to the family
of his adoptive father but a son, whether natural or
adopted, is not nearly related to the family of his
adoptive mother.
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 2nd Exception
S 26(b) Agreement to Compensate for
a Past Voluntary Act.
2 limbs:
(i) a promise to compensate either wholly or
in part the other person (promisee).
(ii)promisee has voluntarily done something
for the promisor.

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 Voluntarily is defined as acts performed

or done of ones free will, impulse or
choice; not constrained, prompted or
suggested by another. CASE: J.M
WOTHERSPOON & CO. LTD V.
HENRY AGENCY HOUSE (1962)

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 S 26(b) - An Agreement to Compensate for an

Act the Promisor Was Legally Compellable to
Do
Necessary ingredients: (i) the promisee has voluntarily done an act;
(ii) The act is one which the promisor was legally
compellable to do; and
(iii) an agreement to compensate, wholly or in
part, the promisee for the act.
Illus (d) S 26: A supports Bs infant son. B
promises to pay As expenses in so doing. This is a
contract.
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 3RD EXCEPTION
S 26(c) an agreement to pay statute-barred debt
A stature-barred debt a debt which could not be
recovered through legal action because of a lapse
of time fixed by law.
Conditions:
(i) debtor made a fresh promise to pay the statutebarred debt.
(ii) the promise is in writing & signed by the
person to be charged or his authorized agent in
that behalf.
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 Illus (e) S 26 A owes B RM1000, but the

debt is barred by limitation. A signs a
written promise to pay B RM500 on
account of the debt. This is a contract.

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