Williams v Roffey Bros & Nicholls (Contractors) Ltd[1989] EWCA Civ 5 is a leading English contract law case. It decided that in varying a contract, a promise to perform a pre-existing contractual obligation will constitute good consideration so long as a benefit is conferred upon the 'promiseor'. This was a departure from the previously established principle that promises to perform pre-existing contractual obligations could not be good consideration.
Roffey Bros was contracted by Shepherds Bush Housing Association Ltd to refurbish 27 flats at Twynholm Mansions, Lillie Road, London SW6. They subcontracted carpentry to Mr Lester Williams for £20,000 payable in instalments. Some work was done and £16,200 was paid. Then Williams ran into financial difficulty because the price was too low. Roffey Bros was going to be liable under a penalty clause for late completion, so they had a meeting on 9 April 1986 and promised an extra £575 per flat for on time completion. Williams did eight flats and stopped because he had only got £1,500. New carpenters were brought in. Williams claimed.
Mr Rupert Jackson QC held Williams should get the eight times £575 with a few deductions for defects and some of the £2,200 owing from the original sum. He said that they had agreed that the original price was too low, and that raising it to a reasonable level was in both sides' interests.
Judgement
Glidewell LJ held Williams had provided good consideration even though he was merely performing a pre-existing duty. Williams got £3,500 (not full expectation damages). He said that the idea of promissory estoppel was not properly argued and 'not yet been fully developed'.[1] The concept of economic duress provided an answer to Stilk's old problem, that an agreement to perform an existing legal duty cannot constitute good consideration for a new contract.[2] The test for understanding whether a contract could legitimately be varied was set out as follows.
if A has a contract to employ B for work
before it is done, A has reason to doubt whether B will, or be able to complete his side of the bargain
A promises B to pay more
A 'obtains in practice a benefit, or obviates a disbenefit' from giving the promise
there is no economic duress or fraud
The practical benefit of timely completion, even though a pre-existing duty is performed, constitutes good consideration. On Stilk v Myrick, Glidewell LJ said,
It is not in my view surprising that a principle enunciated in relation to the rigours of seafaring life during the Napoleonic wars should be subjected during the succeeding 180 years to a process of refinement and limitation in its application to the present day.
However, the principle had not in fact been subjected to any refinement and the three cases he relied on for this proposition - Ward, Williams v Williams and Pao On - unanimously applied it by finding legal consideration (without which the post-contractual modifications would not have been upheld). Glidewell LJ expanded that this test merely refined the Stilk v Myrick principle further but left it unscathed. This is debatable as he held that other practical benefits than those envisaged as the original consideration may per se constitute the requisite good consideration to fulfil the contract (something Stilk v Myrick specifically did not allow). The two cases would until then have been seen as indistinguishable on their facts.[3] or whether he overruled the High Court precedent (later relied on in more senior courts) of Stilk v Myrick.[3]
Russell LJ, giving his own interpretation in the plaintiff's favour held:
The courts nowadays should be more ready to find [consideration’s] existence so as to reflect the intention of the parties to the contract where the bargaining powers are not unequal.
He noted that Roffey Bros' employee, Mr Cottrell had felt the original price to be less than reasonable, and there was a further need to replace the 'haphazard method of payment by a more formalised scheme' of money per flat. "True it was that the plaintiff did not undertake to do any work additional to that which he had originally undertaken to do but the terms upon which he was to carry out the work were varied and, in my judgment, that variation was supported by consideration which a pragmatic approach to the true relationship between the parties readily demonstrates."
In Re Selectmove Ltd[1993] EWCA Civ 8 the Court of Appeal considered Williams v Roffey Bros and decided that the principle should not be extended to part payment of debts.
Breach of contract is a legal cause of action and a type of civil wrong, in which a binding agreement or bargained-for exchange is not honored by one or more of the parties to the contract by non-performance or interference with the other party's performance. Breach occurs when a party to a contract fails to fulfill its obligation(s), whether partially or wholly, as described in the contract, or communicates an intent to fail the obligation or otherwise appears not to be able to perform its obligation under the contract. Where there is breach of contract, the resulting damages have to be paid to the aggrieved party by the party breaching the contract.
Consideration is an English common law concept within the law of contract, and is a necessity for simple contracts. The concept of consideration has been adopted by other common law jurisdictions, including the US.
Estoppel in English law is a doctrine that may be used in certain situations to prevent a person from relying upon certain rights, or upon a set of facts which is different from an earlier set of facts.
The pre-existing duty rule is an aspect of consideration within the law of contract. Originating in England the concept of consideration has been adopted by other jurisdictions, including the US.
Consideration is a concept of English common law and is a necessity for simple contracts but not for special contracts. The concept has been adopted by other common law jurisdictions.
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 across the Commonwealth, from membership in the European Union, continuing membership in Unidroit, and to a lesser extent the United States. Any agreement that is enforceable in court is a contract. A contract is a voluntary obligation, contrasting to the duty to not violate others rights in tort or unjust enrichment. English law places a high value on ensuring people have truly consented to the deals that bind them in court, so long as they comply with statutory and human rights.
Waltons Stores (Interstate) Ltd v Maher, is a leading case in Australian contract law. The Australian High Court decided that estoppel, in certain circumstances, could be a cause of action.
The English law of unjust enrichment is part of the English law of obligations, along with the law of contract, tort, and trusts. The law of unjust enrichment deals with circumstances in which one person is required to make restitution of a benefit acquired at the expense of another in circumstances which are unjust.
Stilk v Myrick [1809] EWHC KB J58 is an English contract law case heard in the King's Bench on the subject of consideration. In his verdict, the judge, Lord Ellenborough decided that in cases where an individual was bound to do a duty under an existing contract, that duty could not be considered valid consideration for a new contract. It has been distinguished from Williams v Roffey Bros & Nicholls (Contractors) Ltd, which suggested that situations formerly handled by consideration could instead be handled by the doctrine of economic duress.
Hartley v Ponsonby [1857] 26 LJ QB 322 is a leading judgment on the subject of consideration in English contract law. The judgment constituted an amendment to the precedent set by Stilk v Myrick that allowed contractual duties to be considered valid consideration for a future contract if the duties had changed to the extent that the original contract is considered discharged.
Unconscionability in English law is a field of contract law and the law of trusts, which precludes the enforcement of voluntary obligations unfairly exploiting the unequal power of the consenting parties. "Inequality of bargaining power" is another term used to express essentially the same idea for the same area of law, which can in turn be further broken down into cases on duress, undue influence and exploitation of weakness. In these cases, where someone's consent to a bargain was only procured through duress, out of undue influence or under severe external pressure that another person exploited, courts have felt it was unconscionable to enforce agreements. Any transfers of goods or money may be claimed back in restitution on the basis of unjust enrichment subject to certain defences.
Pao On v. Lau Yiu Long [1979] UKPC 17 is a contract law appeal case from the Court of Appeal of Hong Kong decided by the Judicial Committee of the Privy Council, concerning consideration and duress. It is relevant for English contract law.
Atlas Express v. Kafco Ltd. [1989] QB 833 is an English contract law case relating to duress.
Collier v P & MJ Wright (Holdings) Ltd[2007] EWCA Civ 1329 is an English contract law case, concerning the doctrine of consideration and promissory estoppel in relation to "alteration promises".
In re Selectmove Ltd[1993] EWCA Civ 8 is an English contract law case, concerning the doctrine of consideration, and part payments of debt.
Oscar Chess Ltd v Williams [1957] EWCA Civ 5 is an English contract law case, concerning the difference between a term and a representation.
Cook Islands Shipping Co Ltd v Colson Builders Ltd [1975] 1 NZLR 422 is a cited case in New Zealand regarding performance of an existing contractual duty to a promisor in economic duress. This case reinforces the English case of Stilk v Myrick (1809) 2 Camp 317; 170 ER 1168
Penalties in English law are contractual terms which are not enforceable in the courts because of their penal character. Since at least 1720 it has been accepted as a matter of English contract law that if a provision in a contract constitutes a penalty, then that provision is unenforceable by the parties. However, the test for what constitutes a penalty has evolved over time. The Supreme Court most recently restated the law in relation to contractual penalties in the co-joined appeals of Cavendish Square Holding BV v Talal El Makdessi, and ParkingEye Ltd v Beavis.
Rock Advertising Ltd v MWB Business Exchange Centres Ltd[2018] UKSC 24 is a judicial decision of the Supreme Court of the United Kingdom relating to contract law, concerning consideration and estoppel. Specifically it concerned the effectiveness of "no oral variation" clauses, which provide that any amendments or waiver in relation to the contract must be in writing.
Pakistan International Airlines Corp v Times Travel (UK) Ltd [2021] UKSC 40 is an English contract law case, concerning economic duress.
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