Re McArdle [1951] Ch 669

Facts

• William McArdle left a house to his five children, subject to a life interest for his widow.
• Marjorie McArdle, wife of one son, undertook significant improvements to the house at a cost of £488.
• These renovations were completed before any agreement regarding reimbursement was made.
• After the work was finished, all five children signed a document promising repayment of £488 from the estate upon the widow’s death.
• Following the widow’s death, the children (other than Marjorie’s husband) refused to pay, leading Marjorie to seek enforcement in court.
• The dispute focused on whether the children’s promise was supported by valid consideration.

Issues

1. Whether improvements made to the house by Marjorie McArdle, completed before the promise to pay, constituted valid legal consideration.
2. Whether a promise to pay for past work could be enforced where the work was not requested nor subject to any prior agreement.
3. Whether the promise to pay could be regarded as an equitable assignment of interest in the property.

Decision

• The Court of Appeal held that past consideration is not valid consideration for the enforcement of contractual promises.
• The renovations were carried out before any promise to pay was made; thus, Marjorie’s actions amounted to past consideration.
• The promise to pay was determined to be a gratuitous gift, not a binding contract.
• Marjorie McArdle’s claim for the £488 failed, as her actions did not support the later promise with legally recognized consideration.

Legal Principles

• Valid contractual consideration must be present or future, not past; an act done before a promise is made cannot be consideration for that promise.
• A gratuitous promise is unenforceable where it lacks a reciprocal obligation, inducement, or contemporaneous exchange.
• The principle of mutuality in contracts requires that a binding promise be given in exchange for a corresponding obligation at the time of contracting.
• Exceptions to the past consideration rule exist where the prior act was done at the promisor’s request or where remuneration was clearly understood, but these did not apply in this case.

Conclusion

Re McArdle [1951] Ch 669 established that promises based on past consideration are unenforceable, reaffirming the requirement that contractual obligations must be supported by present or future consideration and mutual exchange of value at the time of agreement.