Issue

Law:

Application:

Conclusion:

Question 1B - Consideration After the fiasco of the negotiations with Brenda, Gary has decided that the best way to make money from a commercial fishing vessel is to lease it for an annual rental fee. In 2010, Gary leased the vessel to his cousin, Sam, for 10 years at an annual rental of $10,000. In 2012, it became apparent that scallop numbers were declining, and Sam soon realised that he would be unable to meet the annual rental charge unless the catch improved. He approached Gary and advised him of his fishing and financial difficulties. He also complained that the engine in the commercial fishing vessel was not as powerful as he had been led to believe. Gary denied that he had ever made any promises or statements about the engine power. However, he said that he was prepared to halve the annual rental until the catch improved and, accordingly, the rental charge was reduced to $5000. Gary signed a document to this effect. In 2015, the catch improved to such an extent that Sam is able to resume paying $10,000 a year. Gary was delighted and advised Sam that not only did he have to pay $10,000 a year until 2020, but also the $15,000 forgone by Gary in the previous three years. Advise Sam whether he must pay the $15,000 claimed by Gary