This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
It will be noticed that in the definition already given, a consideration is spoken of as a benefit to the promisor, or a detriment to the promisee. The alternative is used regularly in this definition,1 and clearly implies that a legal right, acquired by the promisor, whether from the promise or not, must be a consideration. The question of the accuracy of this definition, and of the sufficiency of a consideration which moves to the promisor from some one other than the promisee, has unfortunately been complicated with the question of whether a promise made by A to B upon consideration moving from B to A, whereby A agrees to do something for C's benefit can be enforced by C.2 Some courts hold that C can not sue on such contract,3 and the confusion of them as entering into the consideration of the note would be to make a contract for the parties to which their minds never assented." Philpot v. Gruninger, 81 U. S. (14 Wall.) 570, 20 L. ed. 743. See, Consideration and Motive as Essentials to a Binding Agreement, by R. H. Gwynne, 47 American Law Review 220. See Sec. 516 et seq.
2 Mawhinney v. Cassio, 63 N. J. L. 412, 43 Atl. 676.
3 Mercer v. Mercer, 87 Ky. 30, 7 S. W. 401. (The legal duty not being affected or discharged by the promise.)
4 Parish v. Stone, 31 Mass. (14 Pick.)
198, 25 Am. Dec. 378; Conrad v. Manning, 125 Mich. 77, 83 N. W. 1038.
5 National Electric Signaling Co. v. Fessenden, 207 Fed. 915.
6 See Sec. 516 et seq.
7 See Sec. 629 et seq.
8See Sec. 632 et seq.
9 Brosseau v. Jacobs' Pharmacy Co., 147 Ga. 185, 93 S. E. 293; Sellars v. Jones, 164 Ky. 458, 175 S. W. 1002.
1 Currie v. Misa, L. R. 10 Exch. 153, 162 [citing, Comyn's Digest, Action on the Case Assumpsit, B 1-15]. See Sec. 514,
2 See ch. LXIII.
3 See ch. LXIII.
1. A may make a promise to B for B's benefit, and B may furnish the consideration. This is the normal type of contract as we shall see later;6 the consideration which moves from B may move to A, or it may move to X, if such is the provision of the contract. * 2. A may make a promise to B for B's benefit, and X may furnish the consideration to A. In such cases X's motive is either tO make a gift to B, or in some way to discharge some liability either to B or to a third person.
3. A may make a promise to B for the benefit of X, and B may furnish the consideration. Cases of this sort, in which the promisee furnishes the consideration and the beneficiary seeks to enforce the contract, are discussed elsewhere.7
4. A may make a promise to B for the benefit of X, and X may furnish the consideration. If B is the agent of X, the case is a very common one,8 and it is in legal effect a contract between A and X, to which B is not a party, except insofar as A may hold B upon such contract if B has not disclosed the fact that X was his principal. If B is not the agent of X, the case might be imagined, but it could not readily be found in reported decisions.
5. A may make a promise to B and X. In such a case a number of subdivisions must be made, based on the question of the party who furnishes the consideration and the party for whose benefit the contract is made.
4 Thomas v. Thomas, 2 Q. B. 851. See cases cited in Sec. 530.
5 Marsten v. Bigelow, 150 Mass. 45, 5 L. R. A. 43, 22 N. E. 71; Styron v.
Bell, 53 N. Car. (8 Jones Law) 222. See Sec. 531.
6 See Sec. 529.
7 See ch. LXIII.
8 See ch. LIV.
a. B and X may furnish the consideration and the promise may be for the benefit of B and X. This is the same case as case 1, except that there are two promisees instead of one.
b. B and X may furnish the consideration and B may be the sole beneficiary.
c. B may furnish the consideration and B may be the sole beneficiary. This, again, is like case 1, except that X is a party to the contract.
d. B may furnish the consideration and B and X may both be beneficiaries.
e. B may furnish the consideration and X may be the beneficiary. This differs from case 3 above only in that X is a party to the contract as well as the beneficiary thereof.
f. A and B may make a promise to X, and the consideration may move from X to A, and not to B.
g. Cases may be imagined and occasionally found, in which the consideration moves neither from the promisee nor to the promisor. A may make a promise to B, the consideration of which is to be an act done by X for the benefit of Y.9 h. Occasionally the promisor confers a benefit upon the promisee which is claimed to be a consideration sufficient to support a promise from such promisor to such promisee.