Currie v Misa (1875) LR 10 Ex 153; (1875–76) LR 1 App Cas 554 is a landmark case in English contract law that established the principle of consideration. The case was heard in the Exchequer Chamber in 1875 and later appealed to the House of Lords in 1876 which upheld the decision of the lower court.
Lizardi & Co which was in good credit sold four bills of exchange to Mr Misa. The bills were drawn from a bank in Cadiz, and Mr Currie was the owner of a banking firm. The bills were sold on February 11th, and as per the custom of the bill, brokers were to be paid on the first foreign post-day following the sale. The first day fell on February 14th.
Lizardi & Co owed a significant amount of debt to Mr Currie's banking firm, and in an effort to reduce the balance, gave a draft or order on Mr Misa for the amount of the four bills. Although the order was dated on the 14th, it was written on the 13th and then delivered to the banker. On the morning of the 14th, the manager of Misa's business issued a cheque for the order, which was then given to Lizardi & Co. However, later that day, Lizardi & Co collapsed, and the manager of Misa's business learned of this and stopped payment of the cheque in the afternoon of the 14th.
The Exchequer Chamber held that the banker was entitled to recover the amount from Mr Misa. The Court also defined that 'a valuable consideration, in the sense of the law, may consist either in some right, interest, profit, or benefit accruing to the one party, or some forbearance, detriment, loss or responsibility, given, suffered, or undertaken by the other'. The decision was upheld by the House of Lords.
You can learn more about this topic and other relevant case law with our Contract Law notes.