TINYOW v LEE and Another

[2006] NSWCA 80

NSW Court of Appeal

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Interrogate

Catchwords

1. Contract
2. › Formation
3. › Consideration
4. › Practical benefit or detriment as consideration
5. › Whether discharge of guaranteed debt constituted substantive equivalent of release from guarantee
6. › Difference between consideration bargained for and consideration by way of practical benefit
1. Contract
2. › Formation
3. › Consideration
4. › Sufficiency of consideration
5. › Whether consideration sufficiently accorded with that bargained for where exact performance was impossible but substantive equivalent was provided
1. Contract
2. › Construction
3. › Oral contracts
4. › Identification of promisee
5. › Whether promise to pay was to individual shareholder or to company
6. › Admissibility of post-contract admissions as to terms of oral contract
1. Contract
2. › Formation
3. › Certainty of terms
4. › Commercial arrangements
5. › Whether contract void for uncertainty
6. › Broad approach to contractual intention in commercial arrangements

Quick Take

Where a party promises to 'give releases' from guarantees but cannot formally do so (only the bank can), discharging the underlying guaranteed indebtedness provides the substantive equivalent of a release and constitutes sufficient consideration. Alternatively, practical benefit to the promisee or detriment to the promisor from discharging the debt suffices as consideration, following Williams v Roffey Bros and Musumeci v Winadell.