2.4.1 Consideration & Promissory Estoppel - Introduction

Welcome to the second lesson of this module guide – consideration and promissory estoppel! This chapter will examine and analyse two principles of contract law. The first is consideration, whichalong with the offer, acceptance and intention to create legal relations, helps form a legally bindingcontract. Promissory Estoppel is a related principle which can act as the exception to one of the mainrules of consideration – that for consideration to be valid, it must have economic value and involve anexchange of benefit/detriment between the parties. This chapter will ensure you understand the rulesof consideration and when exactly promissory estoppel can operate.

This chapter will begin by examining what consideration is, as well as the types and whether the exchange of a benefit or detriment can constitute as it. Following this the requirements and limitations of consideration will be outlined and discussed. The chapter will then move on to consider promissory estoppel, specifically how it operates and its interplay with consideration.

Below are some goals and objectives for you to refer to after learning this section.

Goals for this section

  • To understand what consideration and promissory estoppel are
  • To understand the importance of consideration to a contract
  • To understand the different principles governing consideration

Objectives for this section

  • To be able to define consideration
  • To understand the different types of consideration
  • To understand the requirements of consideration and its limits
  • To understand and be able to apply the legal principles of consideration to a scenario
  • To understand when and how the principle of promissory estoppel operates

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