Question 1 Consideration need not move from the promisee

IV. In the English law, the two rules have led to same result, which the judges
sometimes based on first rule and second rules. To be entitled to enforce a promise,
the first rule is the person must show that promise was made to him. The second rule
is the consideration for promise moves from him. It means consideration must move
from the promise (Sweet & Maxwell n.d.). Thus, if a person provides consideration
other than the promisee then the promisee cannot enforce the contract. In a case of
Price v Easton, the defendant, Easton made a contract with X that in return for X
doing work for him; Easton would pay the plaintiff, Price (third party) £19. X did the
work but Easton refused pay to Price and Price was sued him. The court was held that
Price's claim failed as he was the third party in the contract and he did not provide any
consideration to the Easton (LawTeacher 2003).
However, under Malaysian law, Section 2 (d) of Contract Act 1950, it provide
when the promisor any other person has done something, the act is called
consideration for the promise. The consideration may move from a party who is not
necessarily the promise, it may move from the promise or any other person. Therefore
consideration may move from a third party. In the Venkata Chinnaya v Verikatara
Ma’ya, a sister agreed to pay an annuity of Rs653 to her brothers. Maya’s brother did
not provide any consideration for the promise. But on the same day, their mother had
given the sister some land, stimulating she must pay the annuity to her brothers. But,
the sister failed to pay the annuity to her brother. Thus, her brother was sued her. The
court held that she entitled to pay the annuity as their mother (third party) helps her
brother provide consideration to her. There was good consideration for the promise
even though it did not move from her brothers (Lee 1997, p.96).
In Kepong Prospecting Ltd v Schmidt, the appellant, a mining engineer, actively
assisted a Mr. Tan to obtain a prospecting permit. Mr. Tan promised the appellant give
1% of the selling price of iron produced and sold as a tribute. In addition, they
incorporated the respondent company to exploit the mining rights. In 1954 contract
between Kepong Prospecting Ltd and Mr. Tan, the respondent company took over the
Mr. Tan’s obligation to pay a tribute to the appellant. In 1955 contract between
Kepong Prospecting Ltd and Schmidt, the respondent company made an agreement
with the appellant agreeing to pay a tribute. The court held that the appellant is third
party in the agreement; he cannot enforce the agreement in the 1954 contract
(Alsagoff 2003, p.148). Under Section 2 (d) of Contract Act 1950, it’s true that a third
party made a claim to enforce the contract under Malaysia law, by which
consideration need not move from the promisee. But from the situation above, the
appellant was unable to show how this affected the law as to enforcement of contracts
by third party. Thus, the third party, the appellant could not provide any consideration
to the respondent company. From the decision in this case, the privity of contract is
different from the consideration need not move from the promise (Sweet & Maxwell
n.d.) The consideration need not move means the third party can provide
consideration whereas the privity of contract is the third party cannot enforce the
contract although he or she received the benefit from the contract (Alsagoff 2003,
p.148 & p.110).