Case note- Williams v Roffey Brothers PDF

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Williams v Roffey Brothers & Nicholls 1991 Context: Fundamentally the doctrine requires that something of sufficient legal value be exchanged between parties in order for their agreement to attract the operation of the law. The classic definition of consideration was expressed by Lush J in (Currie v Misa) In his Honour’s words, ‘[a] valuable consideration, in the sense of the law, may consist 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’. There are two types of consideration, executory consideration where there is an exchange of promises to perform acts in the future and executed consideration where the act that had been promised in exchange had been completed. Further rules exist surrounding consideration. Past consideration is not good consideration except if previously requested (Lampleigh v Braithwait) and consideration but be sufficient but need not be adequate. Facts: The defendants were building contractors who entered into an agreement to refurbish a block of 27 flats. The defendants employed the claimant to do the carpentry work for an agreed price of £20,000. The claimant realised he had priced the job too low and would be unable to complete at the originally agreed price. He approached the defendant who had recognised that the price was particularly low and was concerned about completing the contract on time. The defendant agreed to pay the claimant an additional £575 per flat. The claimant continued work on the flats for a further 6 weeks but only received an additional £500. He then ran out of money and refused to continue unless payment was made. The defendant refused to pay the claimant the further sums promised arguing that the claimant had not provided any consideration as he was already under an existing contractual duty to complete the work. Arguments: ??? Decision/ judgements: Glidewell L.J opinion on the case at hand, we see that the judge finds that the defendants promise to pay an additional £10,300 at the rate of £575 per completed flat was part of an oral agreement made between the 2 parties. Moreover, before the plaintiff ceased work, carpentry in 17 flats was substantially completed. Meaning, that between the creation of the agreement and the plaintiff ceasing work 8 more flats were substantially completed. The judge found that Williams was entitled to receive £4,600 for the 8 further completed flats at the rate of £575 each, as well as a further sum of £2,300 which was outstanding from the original contract. So sums totalling £5,000 against which he had only received £1,500 of and the defendants were therefore in breach of contract and the plaintiff was entitled to cease work. Russell L.J. provides the second judgement to this case, he agrees with the previous judgement in that the plaintiff was not entitled to any part of the £10,300 because none of the 8 flats were completed. The topic of economic duress is introduced and challenged by him in that there was no obvious pleading that the defendants were subjected to any duress to make the agreement, or, that their promise to pay the extra £10,300 was lacking in consideration.

The judge found that the plaintiff must have continued work in belief that he would be paid £575 as he finished each of the 18 uncompleted flats. To conclude this judgement it is clear that Russell L.J has not based his judgement on previous case law such as the case of Stilk v Myrick. Where a party undertakes to make a payment because by so doing it will gain an advantage arising out of the continuing relationship with the promisee, the new bargain will not fail for want of consideration. Purchas L.J. provides the final judgement in this case, he states that the evidence provided by Mr. Cottrell, the defendant’s surveyor established to their knowledge, that the original contract price was low to enable the plaintiff to operate satisfactorily and the lack of supervision was reiterated in this judgement which therefore resulted in the financial issues. A further concern expressed by the judge was that the plaintiff had been paid for more than 80%of the work but did not complete anything like this percentage Ratio:

The ratio decidendi that was reached in Williams wasthat a promise to complete an existing obligation could amount to valid consideration if the obligation allows the promisee to gain a practical benefit, or avoid a detriment. Where there was no such benefit, the promise would not be valid as consideration. Furthermore, such a promise would only be valid if the promisor had not used fraud or economic duress in order to force the promisee to make further payment. Comments:

The decision in William's v. Roffey has been moderately influential throughout Britain and the Commonwealth, after the decision was announced the principle was followed without delay in England and Wales, moreover it was also approved in New Zealand by their Court of Appeal. Additionally the principles from Williams v. Roffey have been used to decide other cases; it is known that “some six months after Williams v. Roffey, in Anangel Atlas Companika Naviera SA v. Ishikawajima-Harima Heavy Industries Co Ltd (No 2) Hirst J Applied the Williams v. Roffey principle.” Therefore it can be seen that the decision in the case, has influenced and to a certain extent departed from the traditional rules of consideration. However the decision of Williams v. Roffey is not without its flaws. It can be seen that the decision of the case conflicts with the case of Foakes v. Beer. This case shows how a person promised to not claim interest on another's dept; the contract was seen as unenforceable for “want of consideration.” This is seen as a problem, as even though they are over a hundred years apart there is an issue because Foakes v. Beer was decided by the House of Lords, whereas Williams v. Roffey was decided by the Court of Appeal. Therefore Williams v. Roffey is not considered officially binding precedent until the House of Lords has agreed. Moreover, although some courts have embraced the principles set in Williams v. Roffey, not all of the courts are as willing. Some cases have recognized Glidewell LJ's statement in Williams v. Roffey, but they do not accept it, as they feel it will “render Foakes v. Beer redundant,” this is seen in Re Selectmove Ltd which showed a company that was promised they could suspend payment to the Revenue, however the courts decided this as unenforceable, due to the conflict with Foakes v. Beer.

This decision shows that some courts are not ready to enforce laws that have not been properly accepted by the House of Lords, or explained by legislation. Therefore it is argued that the decision of Williams v. Roffey does challenge the traditional rules, but not entirely successfully.

Context

Fundamentally the doctrine requires that something of sufficient legal value be exchanged between parties in order for their agreement to attract the operation of the law. The classic definition of consideration was expressed by Lush J in (Currie v Misa) In his Honour’s words =

‘[a] valuable consideration, in the sense of the law, may consist 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’.

There are two types of consideration, executory consideration where there is an exchange of promises to perform acts in the future and executed consideration where the act that had been promised in exchange had been completed. Further rules exist surrounding consideration. Past consideration is not good consideration except if previously requested (Lampleigh

v Braithwait) and consideration but be sufficient but need not be adequate. Facts

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Arguments Decisions/ Judgement s

The defendants were building contractors who entered into an agreement to refurbish a block of 27 flats. The defendants employed the claimant to do the carpentry work for an agreed price of £20,000. The claimant realised he had priced the job too low and would be unable to complete at the originally agreed price. He approached the defendant who had recognised that the price was particularly low and was concerned about completing the contract on time. The defendant agreed to pay the claimant an additional £575 per flat. The claimant continued work on the flats for a further 6 weeks but only received an additional £500. He then ran out of money and refused to continue unless payment was made. The defendant refused to pay the claimant the further sums promised arguing that the claimant had not provided any consideration as he was already under an existing contractual duty to complete the work.

??? Glidewell L.J = we see that the judge finds that the defendants promise to pay an additional £10,300 at the rate of £575 per completed flat was part of an oral agreement made between the 2 parties. Moreover, before the plaintiff ceased work, carpentry in 17 flats was substantially completed. Meaning, that between the creation of the agreement and the plaintiff ceasing work 8 more flats were substantially completed. The judge found that Williams was entitled to receive £4,600 for the 8 further completed flats at the rate of £575 each, as well as a further sum of £2,300 which was outstanding from the original contract.

So sums totalling £5,000 against which he had only received £1,500 of and the defendants were therefore in breach of contract and the plaintiff was entitled to cease work.

The judge found that the plaintiff must have continued work in belief that he would be paid £575 as he finished each of

the 18 uncompleted flats. Russell L.J. = provides the second judgement to this case, he agrees with the previous judgement in that the plaintiff was not entitled to any part of the £10,300 because none of the 8 flats were completed. The topic of economic duress is introduced and challenged by him in that there was no obvious pleading that the defendants were subjected to any duress to make the agreement, or, that their promise to pay the extra £10,300 was lacking in consideration. To conclude this judgement it is clear that Russell L.J has not based his judgement on previous case law such as the case of Stilk v Myrick. Where a party undertakes to make a payment because by so doing it will gain an advantage arising out of the continuing relationship with the promisee, the new bargain will not fail for want of consideration. Purchas L.J. = provides the final judgement in this case, he states that the evidence provided by Mr. Cottrell, the defendant’s surveyor established to their knowledge, that the original contract price was low to enable the plaintiff to operate satisfactorily and the lack of supervision was reiterated in this judgement which therefore resulted in the financial issues. A further concern expressed by the judge was that the plaintiff had been paid for more than 80%of the work but did not complete anything like this percentage Ratio

The ratio decidendi that was reached in Williams wasthat a promise to complete an existing obligation could amount to valid consideration if the obligation allows the promisee to gain a practical benefit, or avoid a detriment.

Where there was no such benefit, the promise would not be valid as consideration.

Furthermore, such a promise would only be valid if the promisor had not used fraud or economic duress in order to force the promisee to make further payment. Comments 

The decision in William's v. Roffey has been moderately influential throughout Britain and the Commonwealth, after the decision was announced the principle was followed without delay in England and Wales, moreover it was also approved in New Zealand by their Court of Appeal. Additionally the principles from Williams v. Roffey have been used to decide other cases; it is known that – Therefore it can be seen that the decision in the case, has influenced and to a certain extent departed from the traditional rules of consideration.



However the decision of Williams v. Roffey is not without its flaws.

“some six months after Williams v. Roffey, in Anangel Atlas Companika Naviera SA v. Ishikawajima-Harima Heavy Industries Co Ltd (No 2) Hirst J Applied the Williams v. Roffey principle.”

= This case shows how a person

It can be seen that the decision of the case conflicts with the case of Foakes v. Beer.

promised to not claim interest on another's dept; the contract was seen as unenforceable for “want of consideration.”

This is seen as a problem, as even though they are over a hundred years apart there is an issue because Foakes v. Beer was decided by the House of Lords, whereas Williams v. Roffey was decided by the Court of Appeal. Therefore Williams v. Roffey is not considered officially binding precedent until the House of Lords has agreed.

Moreover, although some courts have embraced the principles set in Williams v. Roffey, not all of the courts are as willing.

This decision shows that some courts are not ready to enforce laws that have not been properly accepted by the House of Lords, or explained by legislation. Therefore it is argued that the decision of Williams v. Roffey does challenge the traditional rules, but not entirely successfully.

Some cases have recognized Glidewell LJ's statement in Williams v. Roffey, but they do not accept it, as they feel it will “render Foakes v. Beer redundant,” this is seen in Re Selectmove Ltd which showed a company that was promised they could suspend payment to the Revenue, however the courts decided this as unenforceable, due to the conflict with Foakes v. Beer....