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Consideration and the Joint Promisee

It is one of the best-known axioms of the common law of contract that consideration must move from the promisee. Expanded, this means that no person can in contract enforce a promise for which he has not provided consideration. As a principle, it has on its side the highest authority and a reasonable degree of antiquity. Ten years ago, however, the High Court of Australia came up with a formula which, while purporting to respect the principle, would, if accepted, have the effect of reducing its impact in a potentially important group of cases. In Coulls v. Bagot's Executor and Trustee Co. Ltd. four of the five High Court judges expressed the view that a joint promisee, if she were party to a contract, could sue to enforce it notwithstanding that she had not herself furnished any part of the consideration. The case concerned a widow whose late husband had contracted to grant a licence to a quarrying company for the extraction of metal from a quarry which the husband owned. Under the contract royalties were to be paid to the husband and wife jointly while they both lived, and there after to the survivor of them. The wife's only part in the proceedings had been to append her signature to the contract document. Barwick C.J. and Windeyer J. (dissenting) held that the plaintiff was a party to the contract and, as a joint promisee, could enforce it notwith-standing that her husband alone had provided the consideration. McTiernan, Taylor and Owen JJ. agreed that if she had been a party the fact that it was her husband who had provided the consideration would not have been an impediment to her.