Contract Exam

Contract one (project delta)

Step 1: Establishing the Contract and Initial Issues

To assess the validity of the contract, it is imperative to meticulously examine its foundational elements.

1. Agreement: The presence of a valid contract hinges on an agreement between both parties. In this case, Thomson engaged
SkyeScape for Project Delta, which entails creating an online payment and booking system for deliveries. This agreement
encompasses mutual consent, involving the offer made by Thomson and SkyeScape's acceptance through the commencement of
the development work. The final payment of £53,000 upon completion further solidifies the agreement's conclusion.

2.intention

3. Consideration: The inquiry into consideration will be delved into with more detail in subsequent steps.

Consideration for Project Delta Contract:

Both parties, Thomson and SkyeScape, are involved in the exchange. SkyeScape's promise to design and build the online system
in return for payments at project milestones constitutes their part of the bargain. The extra payment of £15,000 requested by
SkyeScape introduces a crucial consideration issue.

Maybe highlight that consideration needs to be provided by both parties

Step 2: Defining and Identifying Consideration

Consideration, as defined in Dunlop v Selfridge, refers to an act, forbearance, or promise that forms the price for the other
party's promise. It is essential to ascertain whether the elements of consideration are met in the Project Delta contract.

Step 3: Consideration Issue - Identifying the Correct Issue

The consideration issue involves assessing whether the provided consideration adheres to the principles of valid consideration.
In this case, the specific issue revolves around the extra £15,000 payment made by Thomson to SkyeScape. I would say
something instead like this variation in the contract is a promise to pay more.

Consideration for SkyeScape's Extra Payment:

The additional payment of £15,000, made by Thomson ahead of the project's completion, raises concerns about whether it
constitutes valid consideration. To evaluate this, it is necessary to determine whether Thomson's payment satisfies the
principles of good consideration for variation payments or falls within any exceptions.

Step 4: Consideration rules

I cant tell if you actually need to do this based on the structure you sent me…. I really wouldn’t go into much detail here
unless the rules are really relevant.

Litro one line on each would be so fine just to show you know them.

FOCUS HERE ON THE 4TH RULE!!!=

Step 5: Promise to Pay More - Examining Consideration
Promise to Pay More - General Rule and Supporting Case Authority:
When a party promises an additional payment for an existing contractual obligation, the general rule is that this does not
constitute valid consideration. This principle is exemplified in the case of Stilk v Myrick. In this case, it was held that performance
of an existing contractual obligation is not considered good consideration, as the promisee is not providing something new or
extra.

Exception - Hartley v Ponsonby:

However, an exception to this rule arises from the case of Hartley v Ponsonby. This exception states that if a party goes above
and beyond their existing obligations, their promise to provide more can be seen as valid consideration. In Hartley v Ponsonby,
additional payments were offered to sailors due to increased desertions, rendering the work for the remaining crew significantly
more onerous. This exception applies when the party's performance is significantly altered beyond their existing obligations.

Application to Scenario - Extra Payment and SkyeScape's Promise:

In the context of the extra £15,000 payment to SkyeScape, we must assess whether Thomson's payment goes beyond its pre-
existing obligations. If the promise to engage additional contractors can be considered an alteration beyond the initial scope of
Project Delta, then the exception set out in Hartley v Ponsonby could apply. This exception allows for the promise to pay more
to be viewed as valid consideration, contingent on the determination of whether Thomson's payment signifies an extraordinary
effort beyond its initial obligations.

Glidewell LJ's Criteria from Williams v Roffey:

The case of Williams v Roffey introduces another exception to the general rule. The criteria set out by Glidewell LJ outline the
conditions under which a promise to pay more can be enforceable, even when it involves an existing contractual obligation.
These criteria include situations where a party has doubts about the other party's ability to complete their obligations, and an
additional payment is promised to ensure timely performance. If these conditions are met and a practical benefit is gained, the
promise to pay more becomes valid consideration.

Application to Scenario - Extra Payment and Glidewell LJ's Criteria:

Assessing the promise to pay £15,000 extra, we can apply Glidewell LJ's criteria from Williams v Roffey to determine if the
promise meets the conditions for valid consideration. If SkyeScape had doubts about Thomson's ability to complete the project
on time and promised the extra payment to ensure timely performance, this could satisfy Glidewell LJ's criteria. Additionally, the
practical benefit gained from the timely completion could further strengthen the argument for valid consideration.

This is crucial here^^^^

Also try to merge the rules with the facts of the case rather than separating them out

Conclude analysis of this section by stating whether these exceptions apply or not.

Step 6: Conclude for just this contract!

Contract two (monthly platform fees)

Step 1: Establishing the Contract and Initial Issues

To assess the validity of the contract, it is imperative to meticulously examine its foundational elements.

1.Agreement – no mention of anything yet.

2. Intention to Create Legal Relations (ICLR): The intention to create legal relations is a hallmark of enforceable contracts. Given
the commercial nature of the arrangement, with Thomson engaging SkyeScape for a significant software development project,
there is a strong presumption that both parties intended for the agreement to have legal consequences. The objective nature of
their dealings supports the presence of ICLR.

3. Consideration: As defined as above. This will be delved into with more detail in subsequent steps.

Step 2: Defining and Identifying Consideration

Consideration, as defined in Dunlop v Selfridge, refers to an act, forbearance, or promise that forms the price for the other
party's promise. It is essential to ascertain whether the elements of consideration are met in the Rustico fee reduction scenario.

Step 3: Consideration issue

This variation in the contract is a promise to accept less.

Step 4: Consideration rules

I cant tell if you actually need to do this based on the structure you sent me…. I really wouldn’t go into much detail here
unless the rules are really relevant.

Litro one line on each would be so fine just to show you know them.

FOCUS HERE ON THE 5TH RULE!!!=

Step 4: Rules of Consideration - Ensuring Good Consideration

• Consideration Must Not Be Past:
The general rule, as established in Eastwood v Kenyon, states that past consideration isn't valid consideration. However, an
exception exists as outlined in Pao On v Lau Yiu Long, which allows past consideration to be valid if certain conditions are met.

Application to Scenario - SkyeScape's Extra Payment:

The extra payment of £15,000 by Thomson to SkyeScape occurred ahead of Project Delta's completion. The question arises
whether this payment could be considered past consideration due to Thomson's reluctance. Pao On v Lau Yiu Long provides a
framework for assessing the validity of past consideration. The three conditions—explicit request, understood payment, and no
other enforceability issues—must be evaluated to determine if the extra payment qualifies as valid consideration.

Step 5 (I just changed the number from 6 to 5 cus you’re only talking about this variation issue in this contract) : Promises to
Accept Less - Exploring Exceptions and Promissory Estoppel
Promises to Accept Less - General Rule and Exceptions:
Moving forward with promises to accept less, the rule established in Foakes v Beer dictates that part payment of a debt is not
valid consideration. This rule reflects the general principle that fulfilling an existing obligation does not constitute good
consideration.

Exception 1 - Pinnel's Case and Different Consideration:

An essential exception to this rule arises from Pinnel's Case, which allows for part payment with something different, at a
different location, or earlier than initially agreed. This exception provides flexibility in the concept of consideration when it
comes to debt payment.

Exception 2 - Welby v Drake and Third Party Involvement:

Another significant exception is seen in Welby v Drake, where the involvement of a third party in part payment is considered
valid consideration. This exception highlights that the presence of a third party can impact the consideration dynamic.

Promissory Estoppel - Acting as a Shield:

Promissory estoppel introduces an alternative approach to accepting less. Acting as a "shield and not a sword," this doctrine
prevents a promisor from using a promise as a cause of action but allows the promisee to use it as a defense. It rests on several
key elements.

Elements of Promissory Estoppel - Shield and Elements:

For promissory estoppel to be invoked successfully as a defense, certain elements need to be satisfied:

• Clear and Unequivocal Promise:

• The promise in question must be clear and unequivocal, indicating that strict legal rights will not be fully enforced.
• Change of Position in Reliance:
• A significant factor is a change of position by the promisee in reliance on the promise. This change need not be
detrimental reliance, providing a broader scope for reliance.
• Inequitable to Allow Backtracking:
• The most crucial aspect is that it would be inequitable to permit the promisor to go back on their promise. This element
ensures that the promisee is protected from unfair treatment.

Application to Scenario - Rustico and Promissory Estoppel:

In relation to the Rustico fee reduction, the defense of promissory estoppel can be evaluated through the lens of these
elements. If Rustico can establish that Thomson made a clear and unequivocal promise not to enforce the higher fee, and
Rustico subsequently changed its position based on this promise, it could potentially invoke promissory estoppel as a shield.

So yeah- the promissory estoppel one is the relevant exception here that needs to be looked at so follow this…
Again… I would apply as your going along rather than state all the facts then apply them in separate para cus its more
cohesive and less words

Step 6: Conclude for just this contract!

Step 7: Concluding the Consideration Analysis and Outcomes

Consideration Evaluation - Recap and Assessment:

In this thorough analysis of consideration within the context of the SkyeScape contract variation and the Rustico fee reduction,
we have examined the principles of consideration, evaluated their application, and delved into exceptions where appropriate. By
dissecting the specifics of the situation, we have determined whether valid consideration exists, which is essential for
establishing the presence of a valid contract.

Consideration and the SkyeScape Contract Variation:

Regarding the SkyeScape contract variation, we assessed whether both parties provided consideration for the extra payment of
£15,000. We explored the possibility that Thomson's payment was made reluctantly or under duress. We also delved into the
concept of factual consideration, contemplating whether the payment genuinely aligned with the requirements of valid
consideration.

Consideration and the Rustico Fee Reduction:

In the case of Rustico's fee reduction, we examined the applicability of exceptions to the general rule of promises to accept less.
We scrutinized whether the exceptions provided by Pinnel's Case, Welby v Drake, and promissory estoppel could render
Rustico's reduced fee a valid consideration, considering the unique circumstances of the scenario.

Promissory Estoppel as a Defense:

Finally, we delved into promissory estoppel, recognizing its role as a shield against promisors attempting to backtrack on their
promises. We discussed the elements necessary for invoking promissory estoppel as a defense and applied them to the Rustico
fee reduction situation. By doing so, we considered whether Rustico could successfully employ this doctrine to uphold the
promised fee reduction.

Potential Outcomes - SkyeScape and Rustico:

In conclusion, the outcomes for both the SkyeScape contract variation and the Rustico fee reduction hinge on the evaluation of
valid consideration and the potential application of exceptions, such as promissory estoppel. If valid consideration exists and
meets the requirements, the contracts could be deemed enforceable, providing a basis for legal action if necessary. However, if
considerations are found lacking or if exceptions do not apply, the enforceability of the contracts could be questioned.