COMPLETE IN TEN MINUTESTurn to page 18 in your notes and write down two differences between Balfour and Merritt in terms of legal points.Complete the following question and hand in:3 (b)(i)Discuss whether there has been an offer and an acceptance in the dealings between Farah and Gareth.(7 marks)

Discuss whether there has been an offer and an acceptance in the dealings between Farah and Gareth.Farah decided to get some logs delivered to her house. She saw an advertisement in the local paper, Logs 45 a load leave details and I will deliver. Phone Gareth 7867752.

Discuss whether there has been an offer and an acceptance in the dealings between Farah and Gareth.Farah telephoned Gareth on Monday and left her details on Gareths answering machine.

She asked for a load of logs to be delivered the following Saturday.

Farah was particularly pleased as the usual price of a load of logs was 60.

Discuss whether there has been an offer and an acceptance in the dealings between Farah and Gareth.On Tuesday morning, Gareth left a message saying that the logs would be delivered between 10am and 12 noon on Saturday, as requested.

Discuss whether there has been an offer and an acceptance in the dealings between Farah and Gareth.However, on Friday, Gareth rang back and explained that, as his supplier had let him down, he would no longer be able to deliver Farahs order.

ConsiderationDefinition: Each party to a contract must give something of some value.

Six Key points on Consideration:Anything called a gift is not consideration. A contract cannot be formed through a gift.Consideration must have some value (promise) to be used to bargain with.Consideration is not concerned with whether or not each person receives something of equal value.This is because the law of contract recognises that businesses make a profit by selling a product or service at a higher price than it may actually be worth.Past consideration is not regarded as valid consideration

Consideration can be looked at in two ways:If the person has not yet completed their part of the contract. This is called executory consideration.If a person has completed their part of the contract. This is called Executed consideration.

Decide who has executory and who has executed consideration in the following examples:A agrees with B to pay B 10 to wash As car, and B washes the car.John gets on the bus and pays the bus driver 1 to get to college. The bus breaks down and doesn't get John to college.ExecutedExecutory

Then complete activity Six on page 41.

Past ConsiderationThis the phrase used for something one of the parties has already done.General rule: Anything that is done in the past is not normally regarded as consideration. Therefore there would be no contract.Example: if Prince Harry promises to reward Elton John for a concert that Elton had already performed, the performance of that act is in the past. This means there is past consideration and is not valid in the forming of a contract. Elton couldn't go on and claim Prince Harrys reward as a breach of contract as there was no contract.

Exception where there can be valid consideration for a past request.Where a request is made by one party for the other party to do something, on the understanding that there will be a payment later this is valid consideration.Example: Asking a plumber to fix a leak in an emergency. Clearly the plumber knows that he will be paid for this once the emergency is over.

Consideration must move from the promiseThis means that each side must promise to give or do something for the other.This means there must be at least two promises.The promise can benefit another person other than the ones making the contract.Example: Walter agrees to wash Joannas car as long as Burt pays him 10.Consider if there is consideration on the part of Joanna: Walter agrees to wash Joannas car if Burt pays 10 to JoannaAnswer: There is no promise that is enforceable by Joanna as she gives nothing of value to the other parties.

Contracts (Rights of Third Parties) Act 1999This act has altered the rules about each side having to promise to give or do something for the other. A person who does not promise do something can still be part of a contract and benefit from it if they are named in the contract.Three examples of when this can apply are:A person has ordered goods on the Internet to be delivered to someone elseWhere someone makes a group booking for an event or travelWhere someone has bought the bride and groom a wedding present from a wedding list in a shop

Tasks: Complete Activity 7 on pageComplete the essay on page 22 using the planQuestion 19 June 2010 - consideration application question

Q19 Explain the meaning of the term consideration and identify the consideration in the contract between Juan and AB (7)Juan decided to buy a new computer. He saw an advertisement in the newspaper from PD & co (PD), Brand new computers from 250- phone now.Juan telephoned PD immediately and asked for a price for a computer with features that he wanted.

Q19 Explain the meaning of the term consideration and identify the consideration in the contract between Juan and AB (7)PD rang back with a price of 400, but had to leave him a message as Juan was on the phone. The message was sold to you for 400-ring back with your card number and details.

Q19 Explain the meaning of the term consideration and identify the consideration in the contract between Juan and AB (7)Juan did not pick up the message and bought a computer from AB instead for 345.

Two weeks after the installation, the computer broke down, AB was unable to repair it and, because of supply problems, could not supply Juan with a similar computer. Juan therefore bought one elsewhere which cost him 395.

Mark Scheme saysThere is executed consideration When a person has completed their part of the contract it can be said to have been fulfilled. There is executed consideration on the part of Juan because he pays 345 to AB for the computer. In return there is executed consideration on behalf of AB as they deliver and install Juans computer in working order. (Chapple v Nestle) As each party, Juan and AB, to the contract give something of some value. There clearly is consideration.

Example one is **