Scotson v Pegg [1861]

Scotson v Pegg [1861] EWHC Exch J2 is a legal case that dealt with the principle of consideration in contract law. The case involved a purchaser of coal who paid the defendant for the carriage and unloading of the coal. The claimant, the supplier of the coal, also paid the defendant for the same services. The claimant sought to recover the money paid, arguing that the defendant was already under an existing duty to carry and unload the coal for the purchaser.

The claimant agreed to deliver coal to the defendant, who promised to unload them at a specified rate. The claimant had a prior contract with others to transport and deliver the same coals, which the defendant later bought. The defendant argued that their promise to unload the coal was based on the claimant's prior obligation to deliver, with no additional consideration. The central issue was whether the defendant's existing contractual duty to the claimant could serve as valid consideration for a new promise made to the claimant.

The court held that an existing contractual duty owed to a third party to the contract could constitute valid consideration for a new promise. In this case, the defendant had a pre-existing contractual duty to the purchaser to carry and unload the coal. The court ruled that this existing duty could serve as valid consideration for the promise made to the claimant.

As a result, the claimant could not recover the sums paid, and the defendant was entitled to be paid twice for performing the same services. This decision highlights the legal principle that, in certain circumstances, a duty owed to a third party can be considered as valid consideration for a new contract.