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Williams v Roffey Bros & Nicholls (Contractors) Ltd
Encyclopedia
Williams v Roffey Bros & Nicholls (Contractors) Ltd [1989] EWCA Civ 5 is a leading English contract law
case, which decided that in varying a contract, the court will be quick to find consideration, if "factual benefits" are given from one to another party.
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.
The practical benefit of timely completion, even though a pre-existing duty is performed, constitutes good consideration. On Stilk v Myrick
, Glidewell LJ said,
Russell LJ said ‘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.’
Purchas LJ concurred with Glidewell LJ.
English contract law
English contract law is a body of law regulating contracts 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 , and the United States...
case, which decided that in varying a contract, the court will be quick to find consideration, if "factual benefits" are given from one to another party.
Facts
Roffey Bros was contracted by Shepherds Bush Housing Association Ltd to refurbish 27 flats at Twynholm Mansions, Lillie Road, LondonLondon
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
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.
Judgment
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’. The concept of economic duress provided an answer to Stilk’s old problem. The test for understanding whether a contract could legitimately be varied was set out as follows.- if A has a contract with B for work
- before it is done, A has reason to believe B may not be able to complete
- A promises B more to finish on time
- 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
Stilk v Myrick
Stilk v Myrick [1809] is an English contract law case of the High Court 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...
, Glidewell LJ said,
Russell LJ said ‘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.’
Purchas LJ concurred with Glidewell LJ.
Significance
The doctrine introduced by this decision has been widely criticised.See also
- Pinnel's CasePinnel's CasePinnel's Case 5 Co. Rep. 117a, also known as Penny v Cole, is an important case in English contract law, on the doctrine of part performance. In it, Sir Edward Coke opined that a part payment of a debt could not extinguish the obligation to pay the whole.-Facts:The plaintiff sued the defendant for...
(1602) 5 Co. Rep. 177a - Stilk v MyrickStilk v MyrickStilk v Myrick [1809] is an English contract law case of the High Court 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...
(1809) 170 ER 1168 - Foakes v Beer (1884)
- Compagnie Noga d'Importation et d'Exportation SA v. Abacha (No.4) [2003] EWCA Civ 1100
- Collier v P&MJ Wright (Holdings) Ltd [2007] EWCA Civ 1329
- Watkins & Son Inc. v. Carrig, 21 A.2d 591 (N.H., 1941), Watkins & Son agreed to excavate a cellar for Carrig. Half way through, solid rock was encountered. Carrig promised more money orally, about nine times the amount and the new agreement was enforced.
- Restatement Contract 2d, s.89, "A promise modifying a duty under a contract not fully performed on either side is binding (a) if the modification is fair and equitable in view of circumstances not anticipated by the parties when the contract was made"
- Uniform Commercial CodeUniform Commercial CodeThe Uniform Commercial Code , first published in 1952, is one of a number of uniform acts that have been promulgated in conjunction with efforts to harmonize the law of sales and other commercial transactions in all 50 states within the United States of America.The goal of harmonizing state law is...
, s.2-209