Currie v. Misa

Facts

• The case involved a dispute over a cheque drawn by Misa in favour of Lizardi & Co
• Lizardi endorsed the cheque to Currie (a banker)
• Misa stopped payment on the cheque, alleging fraud by Lizardi
• Currie sued Misa as holder of the cheque
• The central question involved whether Currie had given valuable consideration for the cheque (by crediting Lizardi's overdrawn account), thus making him a holder for value

Issue

1. What constitutes "valuable consideration" in the law of contract, sufficient to support an enforceable promise?

Held

• Lush J delivered the classic definition:
• "A valuable consideration, in the sense of the law, may consist either in some right, interest, profit, or benefit accruing to the one party, or some forbearance, detriment, loss, or responsibility, given, suffered, or undertaken by the other."
• Currie had given consideration by allowing Lizardi to draw against the account (detriment to Currie / benefit to Misa's agent)
• The decision was affirmed by the House of Lords on appeal

Ratio Decidendi

Consideration in English law is understood through the benefit-detriment analysis. If the promisor receives any right, interest, profit, or benefit, OR if the promisee suffers any forbearance, detriment, loss, or responsibility, at the request of the promisor, that constitutes valuable consideration. Both limbs are alternatives; either one suffices.