A cross-border logistics company, TransGlobal Freight, urgently asks an independent consultant to resolve a customs impoundment issue in a foreign port. No fee is discussed. The consultant successfully resolves the issue. Afterwards, TransGlobal promises to pay the consultant £5,000 for their effort, but later refuses to pay. Can the consultant enforce the promise?

Answer options:

No, because the consideration is past, making the promise unenforceable.

No, because there was no written contract formed before the work commenced.

Yes, because the act was done at the promisor's request and it was understood that payment would be made.

Yes, but only under the doctrine of promissory estoppel.

How to approach this question

Identify the rule of past consideration and its specific exceptions (the doctrine of implied assumpsit).

Full Answer

C.Yes, because the act was done at the promisor's request and it was understood that payment would be made.✓ Correct

Generally, past consideration is not good consideration. However, the exception (established in Lampleigh v Braithwaite and refined in Pao On v Lau Yiu Long) applies if: 1) the act was done at the promisor's request, 2) there was an implied understanding that payment would be made (typical in commercial contexts), and 3) the payment would have been legally enforceable if promised in advance.

Common mistakes

Applying the general rule of past consideration without recognizing the commercial exception.

Question 04 All questions Question 06

Practice the full ACCA LW — Corporate and Business Law Practice Exam 4

60 questions · hints · full answers · grading

More questions from this exam

Q01AgriGrow Ltd, a large-scale agricultural technology firm, is pursuing a complex breach of contrac...Medium Q02In the context of judicial precedent, the Court of Appeal (Civil Division) is generally bound by ...Medium Q03Under the Human Rights Act 1998, what action must a UK court take if it finds that a piece of pri...Medium Q04QuantumLeap Tech, a startup, displays a highly specialized server rack on its website with a pric...Medium Q06EcoBuild Ltd contracts to construct a sustainable community center for a local NGO, with work to ...Medium

View all 60 questions →