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Part II Formation, 6 Consideration

From: Contract Law in Practice

Neil Andrews

Content type:
Book content
Product:
International Commercial Law [ICML]
Published in print:
27 May 2021
ISBN:
9780192897947

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2023. All Rights Reserved.date: 22 September 2023

Subject(s):
Construction of contract — Formation of contract — Illegality and contract — Interpretation of contract — Performance of contract — Validity of contract

If the contract has not been formalized as a deed, the agreement will be recognized as legally effective only if the party suing has provided something at the other party’s request as a bargained element. The doctrine continues to apply, but some of its extensions have been either abandoned or diluted. The doctrine of consideration applies not just to initial agreements but to agreements to vary contracts. In the variation context, a notable modern development is that a promise to pay more for performance can be enforced if the court can identify that the promise of extra remuneration is underpinned by a commercial advantage to the person expecting performance. This is the ‘practical benefit’ aspect of variation agreements. Also in the context of variations, the Common Law continues to refuse to recognize a gratuitous promise to extinguish or reduce a debt which has accrued under the contract. It remains controversial whether there is any equitable qualification on this last proposition if the debtor has acted in reliance on the promised and favourable variation made by the creditor.

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