3.1 - Consideration, Causa

 

The common law doctrine of "consideration" (return for a promise), as an essential component of the validity of a contract, is not prevalent in Sri Lanka, as a general rule. In the Roman Dutch law, (and in most continental systems based or the civil law) the simple requirement of “just causa” suffices [Weeramantry, pages 219, 279-283]. This ensures, that the promise is serious and deliberate. However, in respect of contracts governed by principles of English law (mainly because of statutory provisions) consideration may be required, e.g., contracts for the sale of goods and bills of exchange (which are governed by English law).

As regards the doctrine of "causa" (operative generally in Sri Lanka), it is now well established, it means the ground, reason or object of a promise, giving such promise a binding effect in law. It has a much wider meaning than the English term “consideration” and comprises the motive or reason for the promise and also purely moral consideration. [Mr. Justice Wemdt in Lipton v. Buchanan, (1904) 8 NLR 49, confirmed in 10 NLR 158].

In particular, a moral obligation suffices to constitute "causa" [Jayawickrema v. Amarasuriya, (1918) 20 NLR 293, 294, (Privy Council)]. This is in contrast with the common law, where (as a general) rule an existing moral obligation (which is not enforceable at law) does not constitute a good consideration [Currie v. Misa, (1875) LR 10 EX 153].

Lord Mansfield had in 1782 attempted to widen the scope "consideration" of so as to take within its scope a pre-existing moral obligation, [Hawkes v. Saunders (1782) 1 Cowp. 289]. But this theory was rejected within half a century [Eastwood v. Kenyon, (1840) 9 LJQB 409]. It has been said by a very high authority that moral obligation is essentially subjective, while consideration (as known to the common law) is essentially objective [Lord Wright, “Ought the Doctrine of Consideration to be Abolished from the Common Law” (1936) 49 Harvard Law Review 1225, 1235].

It would seem that legal systems all over the world may be classified into the following four categories in this regard:–

  • Countries requiring "consideration" for the validity of contract. Most countries in the common law fold belong to this group.
  • Countries insisting on causa, but without a statutory requirement to that effect. Sri Lanka belongs to this category. So also South Africa [Robinson v. Rendfontein Esels G.M.Co, (1921) AD at 236].
  • Countries where causa is expressly and by statute required, for the validity of a contract. Examples are: Dutch Civil Code of 1838, article 1356. Italian Civil Code of 1865, and Quebec Civil Code of 1858.
  • Countries where the Civil Code requires causa but the requirement is not enforced in practice, e.g., articles 1108, 1131 and 1135, French Civil Code. See the following :–
    • Newman, "The doctrine of Causa or consideration in the Civil Law" (1952) 30 Canadian Bar Review, 662.
    • Von Mehren "Civil Law Analogues to Consideration" (1959) 72 Harvard Law Review 1009.
    • Walton, "Cause and Consideration in contracts" (1925) 41 LQR 306.
    • Weeramantry pages 251, 265.