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Hi sir Mike, I can’t understand the rationale of “Performance of existing contractual duty owed to a third party can amount to valid consideration.”
Ex: In Scotson v Pegg (1861), Scotson was already contractually bound to X to deliver cargo. Pegg contracted with Scotson to unload the cargo himself if Scotson delivered it to Pegg (which he was already bound to do under his contract with X).
My concern: What consideration did Pegg receive? (Textbook says Pegg can “obtain a benefit to which they previously had no right”), but I still believe that had Pegg not contracted with Scotson, Scotson still has to deliver anyway. Also, if Scotson fails to deliver, can both Pegg and X sue him?
We have two separate contracts here.
Firstly, we have the coal merchant contracting with Scotson to deliver and unload coal at Pegg’s premises.
Secondly, unbeknownst to Pegg that Scotson was already bound to deliver and unload, Pegg told Scotson that “in consideration” of Scotson delivering coal to them, Pegg will unload it.The two contracts have to be read in isolation, unaffected by each other. So far as Pegg was concerned, Pegg received the benefit of having the coal delivered and, in exchange, Pegg unloaded it.
Your post says: ‘but I still believe that had Pegg not contracted with Scotson, Scotson still has to deliver anyway’ Quite right. But Pegg didn’t know that – so Pegg believes that he is receiving a benefit and Scotson is therefore able to sue successfully in his attempt to get the money from Pegg.
You also ask, intriguingly (!), ‘if Scotson fails to deliver, can both Pegg and X sue him?’
WOW!!! Not only does Scotson stand to be paid by the coal merchant AND Pegg, you’re suggesting that there’s some possibility that he may choose to breach both contracts! IF, for some outrageous reason, Scotson were to breach this super-lucrative situation in which he finds himself, then, Yes, both the merchant AND Pegg would have just grounds to sue for breach of two separate contracts.
OK?
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