Discuss with reference to the case of Jones v Padavatton 1969 Essay
To fully understand the argument that Collins puts forward, it is a good idea to look at what he is saying in a wider context. Clearly no test can be completely objective – judges and juries are all human. In any case what is a reasonable third party? Reasonable and accountable to whom? And what if a third party, as in a recent case1 could have reasonably taken more than one possible standpoint? Rather, Collins questions whether references to intent in determining the validity of a contract are necessary or indeed, appropriate, as a separate requirement.
In scrutinising the essence of contract, Collins draws on the historical background in which it evolved. Various cases can then be examined, in particular Jones v Padavatton, to see what criteria judges use to determine what they believe to be the intentions of contractors. English Law has historically viewed consideration and form as being separate and distinct from other doctrines in identifying enforceable contracts2.
Since the repeal in 1954 of most of the provisions of the Statute of Frauds3, requirements of form have been less significant except in certain classes of contract, the principal function of validation being performed by the doctrine of consideration. However, because this doctrine could theoretically be applied to legally enforce social exchanges it was tempered by a subsidiary rule requiring a clear intention to be established. Collins4 points out that the yardstick of intention is thus a rule created by default, and as such by implication imperfect.
Remedial by nature rather than intrinsic, he saw it as a product of a slowly evolving common law system, which in growing with all its imperfections, must keep attempting to plug any gaps in previous law with new law. 5 The problem that arises, and the reason that consideration has become so controversial, is the seemingly arbitrary way in which judges may validate it to decide locus standi, adding as they go to the compendium of judicial inventiveness that is common law. It is obviously difficult to distil any absolute rules of thumb from four hundred years of case law. What then is consideration in the eyes of the law?
Currie v Misa6 established that consideration means something which is of some value in the eyes of the law and that it must move from the plaintiff. Items as diverse as chocolate wrappers7 and peppercorns8 have been recognised as good consideration. In the case of the Eurymedon9 the Privy Council decided that a third party (stevedores) were able to use their services as consideration even though, under the classical model, consideration is ineffective if it moves from a third party10. Apparently judges will generally find consideration when necessary, even to the extent of apparently changing the law.
In Williams v Roffey11, the Court of Appeal broke new ground by establishing a distinction between legal and factual consideration. Glidewell LJ, quoting Chitty on Contract, maintained that there was consideration if there were a new benefit to the promisee even without detriment to the promisor. Here, as in Stilk v Myrick12 and its predecessor Harris v Watson13, the judges are clearly aware of their role in determining precedent which could dangerously affect public policy. In light of this, what is objectivity if not a subterfuge for judicial subjectivity?
In Jones v Padavatton, a mother promised her daughter $200 a month to give up her well-paid job in Washington, move to England and study for the Bar. Several years on, the English CA refused to uphold the agreement despite the ostensible presence of consideration, because (quoting Atkin LJ in Balfour v Balfour)14 “each house is a domain into which the king’s writ does not seek to run, and to which his officers do not seek to be admitted. ” Since the Balfour decision, as Salmon LJ pointed out, in domestic context there is a presumption against intention: the onus was on the daughter to prove that it existed.
Fenton Atkinson LJ saw Padavatton’s defence as a retrospective invalidation of contract when she claimed, “a normal mother doesn’t sue her daughter in court… anybody with normal feelings would feel upset. ” Unwittingly she implied, it seemed to him, that when agreeing to the original terms legal action was far from her thoughts. Does this mean that she had no legal rights in contract? Salmon LJ disagrees: “The fact that a … contracting party is unlikely to extract their pound of flesh doesn’t mean that he has no right to it… ” Referring to the objective test as an unfortunate misnomer, he agreed it was necessary.
Disputing the verdict in Shadwell15, he allowed that it illustrated circumstances where the rule is proven by its exception. Nevertheless he thought this agreement different to an ordinary social arrangement. “The daughter here was 34 years of age… employed at a salary of $500 a month… this employment carried a pension… she had a son of seven who was an American citizen… solid reasons for her staying where she was”. In his opinion there was possibly intention although he refused the appeal on other grounds. One thing is clear – judges seem reluctant to establish legal intention in a domestic setting.
The question remains: can there be a contract when there is consideration but no conclusive intention? “16 Is it time, in a move toward harmonisation with the rest of Europe, to get back to the “roots of contract” and requirements of form that are favoured by civil law17? Formal requirements are attended by considerable disadvantages18. Cumbersome and time-consuming, they are seen by some19 as “characteristic of primitive and less well-developed legal systems”. Williams gave rise to a widespread perception of “the death of consideration” when the centrality of the doctrine to contract was questioned.
Lord Goff raised such doubts again 20, and if the courts chose, these arguments could eventually abolish consideration. Russell LJ suggested, “Courts should be more ready to find the existence of consideration… to reflect the intention of the parties”. It seems immaterial whether the test in question determines consideration or intention. Without form no test can ever be objective, and it is ultimately the responsibility of those who advocate the abolition of consideration to formulate a set of alternative rules21.