''Pillans & Rose v Van Mierop & Hopkins'' (1765) 3 Burr 1663 is a case concerning

letters of credit A letter of credit (LC), also known as a documentary credit or bankers commercial credit, or letter of undertaking (LoU), is a payment mechanism used in international trade to provide an economic guarantee from a creditworthy bank to an e ...

, and the doctrine of

consideration Consideration is a concept of English common law and is a necessity for simple contracts but not for special contracts (contracts by deed). The concept has been adopted by other common law jurisdictions. The court in '' Currie v Misa'' declar ...

. It has been recommended as a landmark case in

English contract law English contract law is the body of law that regulates legally binding agreements 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 ...

Lord Mansfield William Murray, 1st Earl of Mansfield, PC, SL (2 March 170520 March 1793) was a British barrister, politician and judge noted for his reform of English law. Born to Scottish nobility, he was educated in Perth, Scotland, before moving to Lond ...

tentatively expressed a view that the doctrine of consideration was redundant. However, in '' Rann v Hughes'' the House of Lords doubted the presumption.17 TR 350

Facts

Pillans & Rose were in business together as merchant bankers in

Rotterdam Rotterdam ( , , , lit. ''The Dam on the River Rotte (river), Rotte'') is the second largest List of cities in the Netherlands by province, city and List of municipalities of the Netherlands, municipality in the Netherlands. It is in the Prov ...

. 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 and would guarantee a pre-existing duty of White to pay Pillans. However, before the bills were drawn on Van Mierop, White went

insolvent In accounting, insolvency is the state of being unable to pay the debts, by a person or company ( debtor), at maturity; those in a state of insolvency are said to be ''insolvent''. There are two forms: cash-flow insolvency and balance-sheet in ...

. Van Mierop refused to honour the bills and argued that Pillans had not provided 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,

Notes

{{reflist, 2

References

*G McMeel, ch 2 in C Mitchell and P Mitchell, ''

Landmark Cases in the Law of Contract ''Landmark Cases in the Law of Contract'' (2008) is a book by Charles Mitchell and Paul Mitchell, which outlines the key cases in English contract law. Content The cases discussed are, *'' Coggs v Barnard'' (1703) on bailment *'' Pillans v Van ...

'' (2008) *

Grotius Hugo Grotius (; 10 April 1583 – 28 August 1645), also known as Huig de Groot () and Hugo de Groot (), was a Dutch humanist, diplomat, lawyer, theologian, jurist, poet and playwright. A teenage intellectual prodigy, he was born in Delft ...

, ''War & Peace''
Book II, Ch 9, para 6, 703-4 and 719-20
* Pufendorf, '' The Whole Duty of Man According to the Law of Nature''
Ch IX, para V-IX, 110-1
Lord Mansfield cases English enforceability case law English consideration case law 1765 in case law 1765 in British law Court of King's Bench (England) cases United Kingdom constitutional case law

Facts

Judgment

See also

Notes

References