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*CONSIDERATIONDefinitionS 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 personConsideration from promisee or third party.

ELEMENTS OF CONSIDERATIONMust be at promisors desireCan move from promisee or 3rd party - S 2(d) promisee or any personCan 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 considerationOne 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.

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(ii) executed considerationA 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 considerationA 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. *

*Public duty imposed on offereeISSUE legal duty performed by someone consideration? CASE: COLLINS V GODEFROY (1831) 1 B & AD 950Facts: 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.

*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.

*ADEQUACY OF CONSIDERATIONConsideration 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.

*Contract Act: agreement is free in the absence of such elements as coercion, undue influence, fraud, misrepresentation & mistake.

*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.

*AGREEMENT WITHOUT CONSIDERATIONGen. Prin agreement without consideration is void.Exception S 26 4 situations:

*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.

*Illust (b) S 26:-What constitute near relation can vary with each social group, depending on customs & social organization.

*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.

*2nd ExceptionS 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.

*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)

*S 26(b) - An Agreement to Compensate for an Act the Promisor Was Legally Compellable to DoNecessary 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.

*3RD EXCEPTIONS 26(c) an agreement to pay statute-barred debtA 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 statute-barred debt. (ii) the promise is in writing & signed by the person to be charged or his authorized agent in that behalf.

*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.