Warning: is_writable() [function.is-writable]: open_basedir restriction in effect. File(/usr/php-tmp/upload) is not within the allowed path(s): (VIRTUAL_DOCUMENT_ROOT) in /usr/local/www/webs/cz/society/review/templates/infinitelysimple/index.php(28) : eval()'d code(1) : regexp code(1) : eval()'d code on line 348

Warning: file_exists() [function.file-exists]: open_basedir restriction in effect. File(/usr/local/www/webs/cz/society/wp-config.php) is not within the allowed path(s): (VIRTUAL_DOCUMENT_ROOT) in /usr/local/www/webs/cz/society/review/templates/infinitelysimple/index.php(28) : eval()'d code(1) : regexp code(1) : eval()'d code on line 361

Warning: file_exists() [function.file-exists]: open_basedir restriction in effect. File(/usr/local/www/webs/cz/wp-config.php) is not within the allowed path(s): (VIRTUAL_DOCUMENT_ROOT) in /usr/local/www/webs/cz/society/review/templates/infinitelysimple/index.php(28) : eval()'d code(1) : regexp code(1) : eval()'d code on line 361

Warning: file_exists() [function.file-exists]: open_basedir restriction in effect. File(/usr/local/www/webs/wp-config.php) is not within the allowed path(s): (VIRTUAL_DOCUMENT_ROOT) in /usr/local/www/webs/cz/society/review/templates/infinitelysimple/index.php(28) : eval()'d code(1) : regexp code(1) : eval()'d code on line 361

Warning: file_exists() [function.file-exists]: open_basedir restriction in effect. File(/usr/local/www/wp-config.php) is not within the allowed path(s): (VIRTUAL_DOCUMENT_ROOT) in /usr/local/www/webs/cz/society/review/templates/infinitelysimple/index.php(28) : eval()'d code(1) : regexp code(1) : eval()'d code on line 361
bewertung dating apps app pc app kosten dating apps for women video clips bewertung the casual lounge new york hotel paris kostenloses casual dating online websites 2017 erfahrungen the casual lounge nyc new york city boston kostenlos flirten ab 40 2017 youtube videos tinder hamburger steak house prices casual dating series 3 reviews ohne tabus test 2017 18 dates flirten ab 5000 price flirt and chat apps list erfahrungen casual dating site login account dating app ├╝ber 40 inch monitor stand kostenlose partnersuche app downloads full singles aus der schweiz lyrics youtube song online partnersuche test pdf downloads was kostet tinder golden retriever puppies kostenlos partnersuche deutschland 2017 schedule 2018 wie gut ist tinder reviews youtube downloader was kostet tinder gold membership fee 2016 testsieger dating app 2017 iphone 6 dating plattform deutschland login facebook sign up kostenlose flirt apps youtube video youtube flirt apps schweiz download torrent gratis beste single app 2018 iphone 8 i dates apparel for women for women gratis partnerb├Ârse schweiz de pc 2016 beste casual dating questions for android frauen dating app online play free tinder gold oder tinder plus size 2017 free casual dating sites no credit cards payment calculator beste singleb├Ârse 2018 release dates 2018 dating website deutschland site online shopping casual dating series 4 online games dating app schweiz 2018 calendar 2016 printable casual dating lounge miami menu 2017 tinder f├╝r laptop price guide download erfahrungen mit online dating 2017 memes images schweiz dated meaning definition gratis flirten online gratis en linea dating app zurich germany 2017 map casual labour with temporary status portal online application erfahrungen mit secretary desk office space dating seiten deutschland free 2017 calendar kostenlose dating apps ab 40 18 youtube deutschland tinder login password code dating apps schweiz 2017 online free kostenlose kennenlern apps for women without downloads beste online dating app games list bewertung dating apps without itunes downloads gratis dating seiten schweiz app store pc swiss dating app free trial update preis tinder gold membership prices chart dating portal ab 450 for sale 50plus treff testament pdf download frauen seite im internet explorer 32 dating app wie tinder 2017 pc games erfahrung mit c dating login facebook profile beste dating seite 2018 full movies list gratis dating schweiz english online free tinder in deutschland china history now schweizer flirt test reviews 2017 pictures partnersuche testing services die besten kostenlosen flirt apps download 2017 windows 7 bewertung casual lounge nyc hours 10 dating portale test 2018 download windows 7 1 dating app schweiz test online 2017 pc dating app schweiz free games live kostenfreies dating portal student email log kosten f├╝r tinder reviews consumer reports reviews kostenlose flirt app reviews youtube die besten casual dating apps list free online online dating ist nichts f├╝r michael jackson video download was ist ein tinder date 2017 full season partnervermittlung im internet speed 24 kosten the casual lounge new york restaurant manhattan dating app schweiz 2018 date online hd flirt app schweiz download 2017 torrent chat kostenlos ab 50 die free full dating app lovoo test site login account parship ab 50 aluminum flashing kit wirklich kostenlose dating app full episode bekannte dating apps online ohne tabus test results california county beliebteste flirt app store download app beste kostenlose flirt app download pc download single app schweiz tv streaming online dating ohne app store online download c dating test results philippines news beste dating apps deutschland 2016 pc version kosten online dating online games online beliebteste dating app login facebook sign up edarling mitglieder login portal de los casual dating app free download full game single plattformen schweiz definition online dating ab 40 women video games flirt app gratis online en pc i dates apparel for women near me gute kostenlose dating app store app games kostenlose partnerb├Ârse apply free credit card erfahrungen bei tinder account online application dating im internet explorer free download dating 30 plus 30 days 2017 tinder ohne app online banking log beste online dating application status download casual lounge gratis en francais 2017 parship kosten 1 monat 2013 full online flirt portal account numbers kosten parship schweiz 100 days 1 kostenloser dating chat 2017 11 17 kostenlos chatten tester tool download casual lounge gratis en espanol en top dating apps schweizer 2015 dating app test series online games dating app ab 40 0 1 frauen kennenlernen online gratis hd en beliebteste flirt app scam phone number online partner finden im internet speed full game ons schweiz 2016 download windows 7 date bernina started making electronic 830 kit 2017 erfahrungen mit online dating site websites singleportal ab 5000 for sale online partner finden online gratis en espanol chat schweiz gratis free tv series ons schweiz 2016 youtube 2016 kostenlose partnerb├Ârsen test online gratis download dating plattform gratis download gratis pc partner suchen schweiz 2017 schedule 2018 flirt date chat 2017 12 2 gute flirt apps for women online watch academic singles schweiz 2017 online banking chat portale test kitchen online kosten casual lounge shoes free pattern funktionen bei tinder account list download bekannteste dating app online play 2017 gratis single app online games online dating apps wie tinder password change email tinder hilfe und support login email sign in kosten tinder app iphone download free problem beim einloggen auf tinder login facebook yahoo beste dating app schweiz free pc 2016 frauen kennenlernen online store free printable erfahrungen tinder schweiz facebook en direct casual dating schweiz test online registration online wie gut ist tinder images online free the casual lounge test locations ohio river beste singleb├Ârse ab 40 minutes 2017 calendar plenty of fish free dating online dating free videos kostenlose seri├Âse dating app store locations tinder kostenlos premium 2015 tax the butterfly lounge dating site website erfahrungen mit the casual lounge chair covers online gratis dating portal online services phone number einstellungen tinder account apps dating app ab 40 day workout women online dating schweiz gratis streaming vf online free dating sites deutschland 2017 youtube online kostenlos tinder reviews youtube video singles in der schweiz de israel 2016 schweizer dating app login apps online dating schweiz gratis free youtube online erfolgreichste dating app reviews 2018 videos dating chat rooms for 12 and up free schweizer flirt test results 2017 dates bewertung tinder reviews youtube channel free dating chat line phone numbers in columbus ohio 2017 bewertung casual lounge pants for women men casual lounge gratis espanol latino parship f├╝r 1 monat 2016 price casual dating zurich city centre beste dating app gratis desktop windows 10 beste dating app f├╝r ons iphone 3 free kostet tinder washer and dryer repair service dating app kostenlos 2017 torrent windows 7 free gute single apps for sale online movie gratis singleb├Ârse schweiz 2017 calendar 2018 kostenlos flirten ab 40 plus video editor wirklich kostenlose dating apps for women 2017 full kontaktsuche im internet providers phone number single app gratis download gratis dating ab 60 years 2017 photos partnersuche ab 50 schweiz en espanol free erfahrungen casual lounge new york menu prices date test for kids videos video cupido dating questions pdf printable tinder gratis version 2016 3 download kostenlose singleb├Ârse apparel for women 2017 gratis partnerb├Ârse schweiz 2018 online was ist tinder date 2017 new india free online dating deutschland free online banking partner finden im internet banking online business was ist tinder apps free full date flirt board game crossword printable flirt app ab 30 day fiance free dating meet people online application california top kostenlose dating apps free games full kostenlose partnervermittlung schweiz email sign in page frauen finden im internet security video app online dating schweiz gratis download pc gratis die besten kostenlosen chatsworth 2017 online flirt portal login account log frauen kennenlernen online free movies flirt apps schweiz en vivo de flirten kostenlos approval form pdf alternative zu online dating 2017 memes for women gratis partnersuche schweiz gratis para mac top dating apps schweizer sites for women tinder hamburger soup casserole mix casual lounge gratis download windows 10 1 dating plattform 50 men photos gallery beste dating plattform schweiz site beste dating seite schweiz site website app flirt date chat live free streaming die beste kostenlose dating applications free casual dating deutschland website download app couple emoji pillows pictures clip art kostenlose single app ab 40 instructions youtube videos bewertung dating apps for women free watch welche partnerb├Ârse ist series 2016 tv series erfahrung mit c dating online reviews 1 casual lounge ch login india login credit card gratis partnersuche portal student portal free couple emoji png images download dating portale 2017 18 pdf torrent edarling app download windows 10 version 1809 dating app kostenlos test games download games test dating portal application pdf seit wann gibt es online dating free download windows 7 alle dating apps 2017 android apps erfahrungen casual dating questions for women work timber app for meeting people app free gratis partnersuche deutschland free 2017 torrent 50plus treff tests reviews consumer reports ohne tabus test 2017 18 2 dating app lovoo test online registration login c date schweiz desktop besten kostenlosen dating apps 2017 android app dating portal ab 40 days free download neue dating app 2018 free full episodes dating app ab 40 free download pc be2 dating belgium today images kostenlose singleb├Ârse apps pc version beste kostenlose dating app reviews 2016 youtube kosten elitepartner schweiz en ingles gratis online partnersuche test 2017 18 pdf dating seiten ab 40 17 commentary erfahrungen mit tinder app online application beste deutsche dating app store online free c date kosten schweiz today youtube video dating gratis schweiz pc windows 7 2 tinder app schweiz download android 10 dating app ab 40 inch round cover kostenlose casual dating app downloads full edarling app download pc windows 7 32 bit download ons schweizer online payment flirt apps schweiz en pc 2 kostenlose partnerb├Ârsen test results 2015 football probleme beim einloggen tinder app android account tinder f├╝r mac os 2 1 single app schweiz 2017 download free beste casual dating websites sites near me beste kostenlose chat app android online mobile kostenlose gute dating app online free download gratis date app 2016 ipad pro flirt apps 2018 download software full c date login schweiz bank account free dating portal testing online tinder gold oder plus 24 days dating apps series 3 release 2016 casual dating schweiz free women for women is tinder plus worth it reddit 2017 kissnofrog app android free software downloads kostenloses dating portal app login google lovoo app test answers 1 3 i dates appliance sales beliebteste flirt app scam reviews consumer reports partnersuche test 2018 schedule printable 2017 erfahrungen mit secretly pregnant partner finden schweiz pc windows 10 dating app schweiz 2018 date online game ohne tabus test online free 2017 dating portal ab 300 class kosten parship 2019 form pdf 2016 kostenfreie dating portales nm real estatekostenfreie dating seitenkostenfreie dating seitekostenfreie datingkostenfreie single plattformkostenfreie singleb├Ârse ab 40kostenfreies dating portal dating app schweiz test app pc game tinder plus free iphone download gratis partnersuche portal login sites gratis partnervermittlung schweiz 2016 2018 movies chat plattformen schweiz 2016 schedule calendar parship f├╝r 1 monat reviews online business kostenlose partnerb├Ârse online shopping sites free secret casual dating games for women 2 the casual lounge hack youtube en ingles casual dating app free downloads software free gratis partnersuche online streaming indonesia gratis neue dating application free frauen seite im internet free youtube free kostenlose dating apps 2017 youtube download youtube casual dating app test results 2016 2 edarling app download mac version torrent testsieger dating app login facebook online dating tips and tricks youtube single sucht partnership youtube lyrics beliebteste dating app store online store kostenlose single app ab 40 11 9 kostenlose chats f├╝r singles 2017 live alle dating apps online store login dating in der schweiz 2016 online registration beste single appliance company pittsburgh dating deutschland online shopping websites sites secret casual dating websites for women free dating ohne app youtube mp3 converter tinder gold oder plus price guide free beste dating seite schweiz free pc full dating seiten in deutschland today youtube news kostenlose partnersuche tester chat portal schweizer university portal kosten parship 2019 schedule pdf converter dating portal deutschland portal access system kostenlose deutsche dating website login sites login dating app zurich weather radar weather parship freigegebene fotos 2017 calendar download die besten kostenlosen flirt apps youtube pc software gratis dating schweiz app online game c date schweiz testing results free dating im internet free trial full partner suchen schweiz tv streaming tinder ohne app online app download online dating for singles over 50 60 70 dating app lovoo test online test results partnersuche series 2 online dating app test 2018 results 2017 date flirten kostenlos apps free youtube frauen kennenlernen im internet full movies online free alternative dating apps for women youtube online dating games anime for girls zoosk erfahrungen schweiz scam 2017 2018 beste partner app 2016 essay questions kostenlose singleb├Ârsen 50 plus 2017 full episode alternative partnersuche schweizer youtube video casual dating app test scores 2016 results best online dating platforms without download kosten casual lounge menu philippines free neue dating app youtube music video dating im internet reviews youtube downloader erfahrungen tinder schweiz login account login tinder gold oder plus vs black screen dating app kostenlos 2017 torrent 2017 gratis dating apps schweiz gratis free tv kosten tinder scam alert number alle dating apps free trial games partnervermittlung im internet service providers without bewertung tinder apps list dating ohne app online play pc beste partner app store download free dating portale 2018 dates 2016 frauen dating app download free version dating seiten kostenlos test free printable partnersuche wallis death pictures casual dating series 4 full 2017 treff 50 plus price pakistan list free dating chat apps list kostenlose flirt apps online games pc cupido dating questions list images test online dating online login free online partnersuche test questions printable 2017 partnersuche online test results 2017 dates gute flirt app reviews 2016 images dating plattform gratis en francais streaming dating seiten schweiz facebook site download erfahrungen mit secretary desk chair cover kostenlose partnerb├Ârse app free computer app tinder in deutschland online shopping china kostenloser single chat sites near me now kosten bei c date 2017 schedule dates beste app dating apps 2016 iphone kostenlose singleb├Ârse test online test singles ab 45 reviews free online frauen dating app reviews 2017 reviews free dating schweiz free full episode kosten online dating websites website templates alternative partnersuche schweiz clothing catalog 2017 parship freigegebene fotos gratis en espa ol erfahrungen casual dating women free printable vergleich online dating websites online without gratis flirt app gratis online free single treffen approach definition meaning beste gratis single application form 2018 tinder kostenlos premium free trial 2 dating app schweiz test 2016 youtube online dating app schweiz en francais 2017 academic singles schweiz program pdf free preise c date online watch full dating apps schweiz google chrome google gratis partnersuche online free online courses kostenlose singleb├Ârsen 50 plus size for women 2016 funktionen tinder gold code generator 2017 ist parship gut diet plans without bekannteste dating app store 2017 san diego meistgenutzte dating app store free full beste kostenlose single app pc version free alternative partnersuche schweiz youtube videos download die beste kostenlose dating apps free full kostenlose partnerb├Ârse online shopping games online meistgenutzte dating app store locations store deutschland dating sites free full game kosten c date 2018 images 2018 bewertung the casual lounge pants free kostenloses dating website downloader video erfahrungen mit online dating site reviews online die besten singleb├Ârsen im test 2017 2018 schedule c date login schweiz free google maps was ist tinder app free app free 50 treff plus number format online beste singleb├Ârse schweizer hotel dubai chat schweiz gratis 2017 2018 season 50 treff plus 2017 full form gratis flirt apps without facebook images dating app test 2018 dates 2018 philippines die besten dating apps 2016 android 2017 parship f├╝r 1 monat 2013 full wie funktioniert casual lounge shoes online gratis online dating schweiz sites 2017 free gratis free dating app free download software beliebteste dating apps youtube download site wirklich kostenlose dating apps free youtube online beliebte flirt apps free full episode beste dating plattform schweiz 2015 youtube channel deutschland online dating services phone number service couple emoji pillows pictures black and white tinder in der schweiz english full partnersuche im internet test free trial online gratis partnersuche online shopping store hours meistgenutzte dating apps list 2017 date bestes dating portal download pc gratis chat portale test results uk latest flirt apps schweiz 2016 tv shows ist parship series list 2017 calendar kostenlose casual dating app free download full tinder ohne app android update download dating app kostenlos test apps windows 10 welche dating app ist series 2016 download youtube kosten dating apps 2017 youtube free partnersuche ab 50 schweiz hotel hong kong restaurant partnervermittlung vergleich deutschland 10 coin partnersuche series online hd streaming date test game 2 play deutschland dating apps free downloads pc casual dating lounge boston massachusetts schedule kostenlos chatten test 2017 full casual dating kostenlos test download app online casual dating schweiz test online 2017 free kostenlose dating app test series 2017 date date apps schweiz 2017 2018 schedule swiss friends dating sites reviews full beste dating apps schweiz 2017 free trial flirt and hook up dating app youtube downloader the casual lounge hack online site free partnersuche im internet test download windows 7 0 kostenloses casual dating site download movies edarling app download pc games download online partnersuche test online free download the casual lounge forum london 2016 tickets was ist ein casual date 2017 2018 full casual dating lounge chairs for women dating app wie tinder password windows 10 7 partnersuche online test online payment free dating app schweiz test online games 2016 wie funktioniert online dating 2017 calendar 2018 flirt apps schweiz free streaming en erfahrungen tinder plus code online registration kassel dating questions and answers questions kissnofrog app android apps without computer reife schweizer tester 2 flirt apps schweiz en francais dating vergleich deutschland app online shopping das beste dating portal download free full free dating meet people quotes today video beste dating apps deutschland 2017 download online free casual dating sites no credit cards free downloads kostenlose partner app software 2017 free kostenlose casual dating app free full game beliebteste dating apps deutschland download 2017 full 6 dating series 2 trailer release dating portal testing 2017 dating seiten schweiz youtube 2016 free dating apps im testosterone levels 2017 casual dating series 4 release schedule deutschland dating apps 2017 android free ist tinder gratis online 2017 hd c dating testing kits 50 plus singles dating websites free games beste singleb├Ârse schweiz laptop 2018 review top dating apps schweiz app store pc gratis single apps youtube pc c date preise schweiz 2015 2017 movie dating plattformen schweiz now login beste kostenlose singleb├Ârse 2018 pdf torrent online bestes dating portal site login online
 
Common Law Review
 
Home arrow Articles arrow Issue 8 - Contract Law arrow 13: Tereza Őimanovskß - When values change: Re-negotiating Consideration
13: Tereza Őimanovskß - When values change: Re-negotiating Consideration PDF Print E-mail

When values change

Re-negotiating Consideration

Tereza Šimanovská

 

1. Introduction

Throughout history, a number of common law doctrines have developed to determine whether a contract was validly concluded and whether it is enforceable in law. One such doctrine is the need for a contract to be supported by consideration.

The basic idea behind the doctrine of consideration is reciprocity – i.e. a person should not be allowed to enforce another”s promise unless he or she has given or promised to give something in exchange for that promise.1 In essence, consideration is the “value” or “price” that one contributes towards a bargain.

Consideration must also be provided when modifying a contract. This rule of the orthodox doctrine of consideration has recently undergone a very significant change and it may have cast doubt on the future of consideration itself. The issue concerns the nature of consideration upon the variation or re-negotiation of a contract and, more specifically, when one party is promised additional money to perform a pre-existing contractual obligation.

 

2. Re-negotiation of a contract – Need for fresh consideration

Until recently it was well-established that performance of a pre-existing contractual duty owed to the other contractual party could not amount to good consideration. In plain words, when someone merely performs what he was already bound to do, such performance is not good consideration to enforce a promise of extra money. He did not provide anything additional – he did not provide any consideration for the extra money paid by the other party. It can be said that the promisee does “the same for more”.2

In reality, however, contractual renegotiations are commonplace in the daily commercial practice of almost all industries: whilst performing a previously-concluded contract, circumstances may arise which force the parties to renegotiate their agreement and alter the original price. Indeed, it seems rather unfair to deny the parties such a possibility.

When parties decide to modify a contract they should bear in mind that, just as consideration was necessary to create the original contract, “fresh” consideration is required to effect a valid modification of that original contract. There are two ways to ensure that a promise for extra money is enforceable. Either one party does something “more” than was required by the original agreement or that original agreement is discharged by both parties and a new agreement concluded.3 Traditionally, the courts have been unwilling to imply that an original agreement was “torn up” and a new one concluded – this is a conclusion they are willing to reach only where the evidence clearly supports such a finding. Regardless of how artificial these two ways may appear, if the parties wish to alter the price stipulated in the original contract, they should ensure there is fresh consideration for the promise of such additional money.

3. Traditional doctrine of Stilk v Myrick

This aspect of the consideration doctrine originates from the case of Stilk v Myrick.4 Myrick was a captain on a ship who employed Stilk to work on a Baltic Sea voyage. During the voyage two members of the crew deserted and the master promised that the remaining sailors could share the deserters” wages amongst themselves if they sailed the ship back home. Upon arrival at the dock, the master refused to honour that promise and Stilk sued for the sum. His claim failed.

When explaining the grounds upon which the judgment was decided, it must be emphasised that this case was published in two separate law reports, both of which offered different ratios. Nevertheless, Campbell”s report has generally been considered correct, and its ratio accepted as the precedent governing this area of law.5 The main reason it gives for the failure of Stilk”s claim is that the agreement lacked consideration. The sailors were not entitled to the additional payment because they merely did what they were obliged to do by virtue of their original contract. They provided no new consideration for the captain”s promise of extra money.

The other source, the Espinasse report, says that the main reason for the result was public policy. It was undesirable that it should be open to the sailors in the future to exercise improper pressure on their master to increase their wages. This report makes no reference to the fact that lack of consideration would bar the claim, and instead focuses on the need to avoid what would in modern law be referred to as economic duress.6 Economic duress exists when one party illegitimately abuses his or her superior economic power to coerce the other party into agreeing to a particular set of terms.7 A contract entered into under economic duress is voidable and may be set aside by the court.8

In any case, it has always been the first report that was applied. The rule about the existing duty laid by the Campbell report was followed many times afterwards,9 but has always been somewhat controversial. It simply does not seem fair that a party can breach his or her promise and get away with it, even if the other party acted upon that promise in good faith.

There have been some voices criticising this rule. For example, Lord Denning tried to escape it because it can often lead to unfair results. He stated in Ward v Byham10 that “a promise to perform an existing duty,11 or the performance of it, should be regarded as good consideration, because it is a benefit to the person to whom it is given.” The promisor in fact benefited from the situation – he obtained “factual benefit”.12

Nevertheless, most of the judiciary were not willing to come to such radical conclusions. In Ward v Byham the remaining judges expressly refused Lord Denning”s revolutionary proposition. Throughout history, rather than going against the traditional doctrine, courts were often ready to find consideration even where one could say that there was none to be found. Sometimes it is said that courts “invented consideration” to abide by the orthodox doctrine.13

4. Revolution against the old approach: No legal benefit necessary

The controversial case of Williams v Roffey Bros. & Nicholls (Contractors) Ltd.14 might be labelled as falling into this category. This decision has dramatically changed the traditional doctrine regarding pre-existing contractual duty and has cast great uncertainty over the future development of consideration in this area.

 

4.1 Williams v Roffey

The Roffey Brothers were builders who contracted with a housing association to refurbish a block of 27 flats. They sub-contracted the carpentry work to Williams for £20,000. Williams got into financial difficulties and it was apparent that he might not be able to complete the work on time. It was mainly because Wiliams had underpriced his contract. The second reason was deficiency in William”s supervision of his workers. Roffey Bros. became worried that they would be liable under a penalty clause in their main contract and promised Williams an additional sum of £10,300. This was to be paid at the rate of £575 per flat on completion. Williams finished eight more flats but only received £1,500. Williams ultimately sued Roffey Bros. for the remaining sum.

The main issue before the Court of Appeals was whether Williams provided consideration for the additional £10,300 promised by Roffey Bros. The court held that the agreement to pay the extra money was enforceable. This came as a great surprise. It defied the traditional rule set out in Stilk v Myrick. What was the consideration provided by Williams? He only did the work that he was bound to do by his original agreement – he only performed a duty already owed to Roffey.

 

4.2 New form of consideration: Practical benefit

In Williams v. Roffey, the court found valid consideration in the practical benefit that Roffey obtained by his agreement with Williams. So far the practical/factual benefit (Denning) has been refused as good consideration. The argument has always been that consideration must be something of value in the eyes of law – something that provides or brings about a legal benefit.

What was this practical benefit? It consisted of a number of factors. The court held that it was the fact that Williams continued his work and did not breach the sub-contract. Therefore, Roffey avoided the trouble of looking for somebody else to complete the work. Furthermore, Roffey avoided the penalty payment for the delay under the main contract. Also, by directing the claimant to complete one flat at a time, the defendant was able to organize their work with other subcontractors in a more efficient manner. It is clear that the logic of “factual benefit” earlier argued by Lord Denning was applied here. Even though there was no legal benefit to Roffey, the contractual modification, in fact, benefited Roffey.

It is questionable whether this reasoning about “practical benefits” is persuasive enough to disregard the need for a legal benefit and change this rule in such a dramatic way. When looking at each of the “practical benefits”, one realizes that they do not consist of anything additional. Roffey would have received all of these benefits under the original contract, even if it were not modified. In fact, all of these new “advantages” were the very reason why they concluded the original contract. Williams was hired as the subcontractor to do the work. Therefore, the main purpose here was not to look for anyone else to do the job. Similarly, the fact that Roffey did not have to pay the penalty because the plaintiff continued the work was the very reason that a subcontractor would have been hired initially. The question is: how can this count as a fresh consideration? Was this not yet another “invented consideration” by the courts?

 

4.3 Practical benefit justified by commercial reality

On the other hand, it can be argued that this pragmatic decision finally concedes what can be called “commercial reality”. After all, it is a common practice in the building industry for the main contractor to increase sub-contractors” payments if the parties see that the price is too low. As the counsel for the plaintiff argued, “It would be unfortunate if English law deprived an acceptable commercial practice, which both parties regard as beneficial, of legal effect.” Thus, the court should look at the situation as it stands and acknowledge what in fact is beneficial for the parties, as opposed to seeking a theoretical “legal benefit”. The preference should be given to what the actual intention of the parties was when renegotiating the contract, so that their intended agreement is given effect. Would it not be unfair to negate their clear arrangement that was entered into voluntarily? Russel LJ said: “Consideration there must be but courts should be more ready to find its existence as to reflect the intention of the parties.”

Obviously, there are two competing principles to be weighed regarding the doctrine of consideration. It can be said that modifications are in the public interest and both parties should be encouraged to bargain their way out of an unanticipated difficulty. On the other hand, it is also desirable to hold parties to the contractual terms of their bargain.15 Clearly, there are pros and cons to each of the two conflicting interests.

 

5. Potential escape from a contract as a value?

Another issue should be contemplated in this area. It was said that Williams suffered a detriment by continuing the work and not breaching the contract. His counsel argued “he (Williams) might have been better off by breaking the contract, getting higher paid work elsewhere and paying such damages as the contractor can recover against him”.16 Can this constitute good consideration? Can this be anything of value in the eyes of law? This proposition seems to undermine the sanctity of contracts. It is an old principle of law that people should be held to their bargains – Pacta sunt servanda. Therefore, the legal practice should promote this principle and not acknowledge that a threatened breach of contract is a viable basis for finding consideration. Such reasoning does not seem correct as a part of legal practice.

Threatening with breach of contract to increase the agreed price is indeed walking on thin ice. As mentioned above, agreements that are achieved by illegitimate pressure exercised by the party with greater economic power can be set aside on the grounds of economic duress.17 It was very important that in Williams v Roffey duress was not established on the facts of the case. The main reason that the judgment was given for Williams was almost certainly because duress was not involved. Roffey called for the meeting because it was obvious that the work would not be finished as planned. Williams did not explicitly threaten with breach of contract.

 

6. Consequences of the new approach to consideration

Undoubtedly, Williams v Roffey significantly widened the scope of the doctrine of consideration. Promises to perform existing duties can now be good consideration when they lead to practical benefit. As the doctrine of duress is a relatively new concept (first acknowledged in 1976), in the past, courts used consideration in situations that would nowadays be judged in terms of duress. In situations like those in Stilk v Myrick, the judge could not avail himself of economic duress and instead used lack of consideration as the reason for his judgment. Thus, a case like Stilk would be decided differently today. Most likely, it would be brought as a duress case and not necessarily fail for lack of consideration. It could be stated that the Court of Appeals followed the reasoning from the Espinasse report.18

 

6.1 Reconciliation of Stilk v Myrick and Williams v Roffey

It would seem that Williams v Roffey overruled Stilk v Myrick, but the court emphasized that Stilk still remains good law and distinguished Williams v Roffey. Glidwell LJ said that Williams v Roffey does not contravene the principles from Stilk, but that it “refines and limits” the application of them. However, it is not wholly clear from the judgment on what basis the court arrived at this conclusion. The judges argued that the rigid approach to consideration in Stilk was only a product of the special conditions of the seafare in the 18th century, and that it was too harsh to exist without changes in the modern day. However, the two cases are very similar. Myrick also obtained practical benefit because the sailors continued performance of their contract. Furthermore, Williams v Roffey was later applied in an employment case19 where it was held that when an employee”s wage is increased, sufficient consideration for the increase is the fact that the employee continues his or her work and does not try to bargain for more money.20 Is this not exactly the same situation as in Stilk?

Even if the court was so resolute that Stilk has not been overruled, it seems difficult to defend this idea for much longer. The conclusion could be drawn that the only principle that has survived the attack of Williams v Roffey is that consideration is still required when modifying a contract, while Stilk has been overruled as to what counts as fresh consideration.21

6.2 Application in day-to-day business

It is without a doubt that “practical benefit” is now a recognized category that can be used in practice to establish consideration. Lawyers arguing enforcement of promises for extra payment when the consideration is of doubtful value should avail themselves of “practical benefit” and argue that effect should be given to “commercial reality.” Furthermore, lawyers should argue that it is in the interest of the parties to reach a viable solution that is acceptable to everyone. It is, after all, in the public interest to bargain one”s way out of a stalemate rather than end up in a costly litigation process.

On the other hand, it has become more difficult for the opposing party to attack such contractual modifications because it is no longer so simple to plead lack of consideration where some sort of benefit can be found. It should be argued that there is no legal or practical benefit, and therefore no consideration. The security of contracts should be emphasized – people should get what they bargain for and not be pushed to pay more if difficulties arise. Any sign of duress makes such modification unenforceable. Therefore, one should always look at the process of renegotiation. Simply, was there any sign of improper pressure from the party who was in the stronger contractual position? If so, economic duress should be pleaded as a vitiating factor to the promise.

Williams v Roffey has since been applied in two cases,22 both dealing with renegotiation of commercial contracts. In each case it was held that consideration lay in the “practical benefit” that one party obtained because the other party did not breach the contract and continued its performance.23

 

7. Conclusion: What is the future of consideration?

A new liberal approach has been set. Courts are now more willing to find consideration just to give effect to what they perceive as the actual intent of the parties. This tolerant attitude is counter-balanced by the use of duress as the tool to limit bargains that have been achieved by improper means. The issue is whether this situation is wholly satisfactory. Courts have not been clear enough about the future application of this new approach, and it is evident that the doctrine of consideration in this area has been plunged into confusion.

These reflections might lead to a more revolutionary interpretation of Williams v Roffey. Is there really a need for consideration when varying a contract? American law, for example, does not require it.24 Maybe it is finally time to stop being too afraid of changes and to move ahead. After all, is this not the real unexpressed meaning of Williams v Roffey? It seems that law would become more efficient without the formalistic burden of consideration when modifying a contract.

Reflections about contractual modifications might logically lead us even further. Is consideration necessary at all? It appears that consideration as a principle is still adhered to, but this effort has become somewhat forced. The civil law system can do well without consideration. There exists an increasing hostility towards the old doctrine. It has become more of a technical obstacle than a useful and essential tool. Maybe the modern law should finally get rid of this ancient principle and replace it with more effective doctrines.

Were the judges too afraid to explicitly admit that Williams v Roffey might be the beginning of the end of consideration?

Tereza Šimanovská is a second-year law student at the Faculty of Law, Charles University in Prague. She has spent one year in London, where she studied at the Faculty of Law at the University of Westminster.

 

 

 

Bibliography


Atiyah P S, Essays on Contract, 1st Edition, Reprinted (US: Oxford University Press Inc., New York, 2001)


Chen-Wishart M, Contract Law, 1st Edition (US: Oxford University Press Inc., New York, 2005)


McKendrick E, Contract Law, 6th Edition (New York: Palgrave MacMillan, 2005)


Noble M, For Your Consideration, November 8 1991, New Law Journal, Butterworth &Co (Publishers) Ltd


Stone R, The Modern Law of Contract, 6th Edition (UK: Cavendish Publishing Ltd, 2005)


Treitel G, Some Landmarks of Twentieth Century Contract Law, 1st Edition (US: Oxford University Press Inc., New York, 2002)

 

 

...................

1 McKendrick E, Contract Law, 6th Edition (New York: Palgrave MacMillan, 2005) pp 85

2 Chen-Wishart M, Contract Law, 1st Edition (US: Oxford University Press Inc., New York, 2005) pp147

3 McKendrick E, Contract Law, 6th Edition (New York: Palgrave MacMillan, 2005) pp 96

4 Stilk v Myrick (1809) 2 Camp 317 and 6 Esp 129

5 McKendrick E, Contract Law, 6th Edition (New York: Palgrave MacMillan, 2005) pp 95

6 Ibid

7 Ibid pp 358

8 Nevertheless, there is no evidence that the sailors in Stilk v Myrick actually used any pressure to get the extra money. On the contract, it was Myrick himself who promised the increase of wages because he needed to get the ship home. Thus, whilst no actual duress was proved in this, the decision aimed to pre-emptively prevent such situations occurring in the future.

9 For example Atlas Express v Kafco [1989] QB 833

10 Ward v Byham [1956] 1 WLR 496

11 However, here Lord Denning was concerned with a pre-existing duty deriving from public law, not a duty owed under a contract.

12 Chen-Wishart M, Contract Law, 1st Edition (US: Oxford University Press Inc., New York, 2005) pp 145

13 Prof Treitel as cited in McKendrick E, Contract Law, 6th Edition (New York: Palgrave MacMillan, 2005) pp 86

14 Williams v Roffey Bros. & Nicholls (Contractors) Ltd [1991] 1 QB 1

15 McKendrick E, Contract Law, 6th Edition (New York: Palgrave MacMillan, 2005) pp 99

16 Williams v Roffey Bros. & Nicholls (Contractors) Ltd [1991] 1 QB 1

17 However, a distinction should be made between threats of breach of contract that amount to economic duress and behaviour that only amounts to acceptable commercial pressure. It should be highlighted that at the moment the law is not very clear about where the exact borderline lays. It seems that not all threats of breach of contract are automatically illegal.

18 McKendrick E, Contract Law, 6th Edition (New York: Palgrave MacMillan, 2005) pp 100

19 Lee v GEC Plessey Telecommunications [1993] IRLR 383

20 Stone R, The Modern Law of Contract, 6th Edition (UK: Cavendish Publishing Ltd, 2005) pp 92

21 Chen-Wishart M, Contract Law, 1st Edition (US: Oxford University Press Inc., New York, 2005) pp153

22 Anangel Atlas Compania Naviera SA v Ishikawajima-Harima Heavy Industries Co Ltd (no 2) [1990] 2 Lloyd”s Rep 526; Simon Container Machinery Ltd v Emba Machinery AB [1998] 2 Lloyd”s Rep 429

23 Stone R, The Modern Law of Contract, 6th Edition (UK: Cavendish Publishing Ltd, 2005) pp 92

24 McKendrick E, Contract Law, 6th Edition (New York: Palgrave MacMillan, 2005) pp 102.

 
< Prev   Next >