Case name and citation:

Williams v Roffey Bros & Nicholls (Contractors) Ltd [1989] EWCA Civ 5; [1991] 1 QB 1; [1990]
1 All ER 512
Court and judges:
Court of appeal (Civil Division); Purchas, Glidewell and Russell L.JJ.
Parties:
Appellant: Roffey Bros & Nicholls (Contractors) Ltd.
Respondent: Lester Williams
Material facts:
The plaintiff got into financial issues after entering into a subcontract to carry out carpentry
work in a block of twenty-seven flats. This is due to the agreed price which was $20,000.
When it became apparent Williams could not complete on time, the defendants then made
an oral agreement to pay the plaintiff an additional sum of $10,300 at the rate of $575 each
flat. This is to ensure the plaintiff finish the work on time as the main contract contained a
time penalty clause.
However, even after the plaintiff worked on another eight more flats, the defendants only
paid $1,500. Due to this issue, the plaintiff stopped working on the flats and filed a lawsuit
against the defendants for the promised additional money and breach of contract. The
defendant also issued another carpenter to finish the remaining flats and refused to pay the
further sums promised.
Question of law/issues
The issues before the court are that the appellants argued that (i) the promised additional
money was unenforceable. This is because Williams did not provide consideration for the
promise and Williams was only agreeing to do what he was already bound to do in the
original contract. Moreover, (ii) they counter-sued the plaintiff and thinks that the claimant
had wrongfully ceased working as he merely substantially completed the carpentry work in
17 of the flats. (iii) Can there be sufficient consideration for a pre-existing duty?

Decision
Court of Appeal held that the defendant was entitled to the original contract price. Hence,
all three of the issues are rejected and the appeal was dismissed. The leave to appeal to
House of Lords was granted.
Detailed reasons for the decision
It was mentioned that the appellants tried to rely on the principle laid down by Stilk v
Myrick. This addresses one of the issues which they argued they did have to pay the
additional sum as the work was already in William’s scope of duty. This case could not apply
in here.
This was because the Court of appeal decided to give consideration a wider meaning and
not restrict the definition of it as it could involve benefit and detriment. They decided
another approach which was using the development of economic duress to justify a more
lenient approach of identifying consideration. Furthermore, there was no fraud or duress by
Williams to obtain the promise that was offered by Roffey Bros.
Glidewell LJ’s conclusion involved saying that the rule in Williams v Roffey refined and
limited the application of the principle laid down in Stilk. Even though as referenced in
Mocatta J in North Ocean Shipping Co Ltd v Hyundai Construction Co Ltd., The Atlantic
Baron, where she considered the principle laid down Stilk v Myrick as good law, it cannot be
relied on this cause because the promisor in Williams v Roffey had received practical
benefits.
Lord Justice Purchas said that the practical benefits were received by both sides.
Consideration is only valid when each party must give something in return for what is gained
from the other party. Otherwise, the promise is a gratuitous promise. Based on this, the
court held that Williams had indeed provided consideration in return for Roffey’s offer to
pay him an extra $10,300. The Roffey Bros could avoid penalty clause from late delivery of
flats and avoided losing money. They also avoided the cost and inconvenience of finding
another contractor, which saves time and money. Both of the parties’ benefit from the
altered working arrangements.
The court of appeal has also rejected the argument that was made by the appellant, who
argued that the additional payment was unenforceable as the remaining flats had been
substantially completed, by virtue of Hoenig v Issacs. The appellants argued that
substantially completed does not mean ‘completed’. The reason why the flats being
substantially completed is eligible for the extra payment was because the appellants said
they wanted to flats to be completed. Glidewell LJ decided to rely on the regulatory
approach of tackling a contractual provision for payment on completion, which means
William was entitled to be paid on substantial completion. The judges agreed that the
contract interpreted the flats completed that as a term of the contract, not a condition.
Since they did not break the term of the contract, there was no breach.

Ratio Decidendi
The ratio decidendi that was reached in Williams was that in varying a contract, a promise to
complete an existing contractual duty could amount to valid consideration if this duty allows
the promise to avoid a penalty clause or gain practical benefits. Where one party’s promise
to perform an existing contractual duty confers an additional practical benefit on the other
party, then it will be sufficient consideration to make a promise given in return binding.
If there are no such benefits conferred on the promisee, it would not be valid as
consideration. Another important point was that it is only valid consideration if there was no
fraud or economic duress involved to force the promisee to make further payment.
(887 words)