Pillans v Van Mierop
Encyclopedia
Pillans & Rose v Van Mierop & Hopkins (1765) 3 Burr 1663 is a case concerning letters of credit, and the doctrine of consideration
. It has been recommended as a landmark case in English contract law
. In it, Lord Mansfield tentatively expressed a view that the doctrine of consideration was redundant. It was doubted in a later case by the House of Lords, Rann v Hughes.
. They agreed to accept bills from White, an Irish merchant, on one condition. White had to make sure Van Mierop & Hopkins, a big London firm, would guarantee the bills. Van Mierop confirmed that they would do so - in other words that they would guarantee a pre-existing duty of White to pay Pillans. However, before the bills were drawn on Van Mierop, White went insolvent. Van Mierop refused to honour the bills. Van Mierop argued that Pillans had provided no consideration for their guarantee, since there was the rule that past consideration is not a good consideration.
Wilmot J said,
Consideration
Consideration is the central concept in the common law of contracts and is required, in most cases, for a contract to be enforceable. Consideration is the price one pays for another's promise. It can take a number of forms: money, property, a promise, the doing of an act, or even refraining from...
. It has been recommended as a landmark case in English contract law
English contract law
English contract law is a body of law regulating contracts in England and Wales. With its roots in the lex mercatoria and the activism of the judiciary during the industrial revolution, it shares a heritage with countries across the Commonwealth , and the United States...
. In it, Lord Mansfield tentatively expressed a view that the doctrine of consideration was redundant. It was doubted in a later case by the House of Lords, Rann v Hughes.
Facts
Pillans & Rose were in business together as mechant bankers in RotterdamRotterdam
Rotterdam is the second-largest city in the Netherlands and one of the largest ports in the world. Starting as a dam on the Rotte river, Rotterdam has grown into a major international commercial centre...
. They agreed to accept bills from White, an Irish merchant, on one condition. White had to make sure Van Mierop & Hopkins, a big London firm, would guarantee the bills. Van Mierop confirmed that they would do so - in other words that they would guarantee a pre-existing duty of White to pay Pillans. However, before the bills were drawn on Van Mierop, White went insolvent. Van Mierop refused to honour the bills. Van Mierop argued that Pillans had provided no consideration for their guarantee, since there was the rule that past consideration is not a good consideration.
Judgment
Lord Mansfield held that the doctrine of consideration should not be applied to preclude enforcement of promises made in mercantile transactions.Wilmot J said,
See also
- Rann v Hughes (1778) 4 Bro PC 27, 7 TR 350, supposedly overruled Lord Mansfield on the consideration point.
- Pierson v Dunlop Cowp. 571, per Lord Mansfield
- Coolidge v. Payson 15 US 66 (1817)
- Swift v. TysonSwift v. TysonSwift v. Tyson, , was a case brought in diversity in the Circuit Court for the Southern District of New York on a bill of Exchange accepted in New York in which the Supreme Court of the United States determined that United States federal courts hearing cases brought under their diversity...
41 US 1 (1842)