Scotson v Pegg (1861) 6 H & N 295

Key point

  • A promise can be good consideration for a contract even if the same thing was promised to a third party in another contract.

Facts

  • C had promised under a contract with third party X to deliver cargo of coal to D.
  • D told C that “in consideration” of C delivering coal to them, they will unload it at a stated rate.
  • D failed to do so, and C sued for breach.
  • D argued that C had not offered good consideration since C was obliged to deliver the coal anyway under its contract with X.

Held (Court of Exchequer)

  • D was in breach of contract.
  • The delivery of coal was good consideration.

Martin B

  • The case is to be dealt with as though no prior contract had been entered into.

Wilde B

  • Performance of existing duty under contract with third party is valid consideration as it still confers benefit upon the other party.
  • While the same consideration can only be used once against one person, it can be used as consideration to different promises from different people.