CASE COMMENT

Williams vs. Roffey Bros. & Nicholls: A Comprehensive Assessment of the principle of
Practical Benefit and how challenges the Traditional Rules of Consideration

This article seeks to assess the various elements of the doctrine of consideration, in the light of
the judgment pronounced in the case of Williams v. Roffey Bros. & Nicholls. It demonstrates
how the concept of a practical benefit where an existing legal duty is sought to be modified has
respectable historical antecedents which tend to support the reasoning in the controversial
decision in Williams v Roffey Bros and peruses the judicial reasoning and application of this
judgement.

INTRODUCTION

Consideration can be defined as something of value given by both parties to a contract that
induces them to agree to exchange mutual performances, which is enforceable by law. A
valuable consideration in law may consist of ‘some right, interest, profit or benefit to one party
or some forbearance, detriment, loss or responsibility suffered or undertaken by the other’ 1. The
doctrine of consideration lies at the very heart of the formation of contractual obligations and
liabilities with redefining its contents in any manner causes a drastic change in how contracts are
perceived and what falls within its ambit. Williams vs. Roffey bros. and Nicholls (Contractors)
Ltd (‘Roffey’) is one such case that departs from the traditional rule of consideration, namely the
pre-existing duty rule for which Stilk vs Myrick (180) 170 ER 1168 (‘Stilk’) is a leading
authority. The ‘pre-existing duty rule is a common-law rule in contract law which states that
valid consideration for a new promise cannot be constituted by the performance of an act which
the party is already contractually bound to fulfil. The decision taken in Roffey2 is highly
controversial as the consideration in this case was found to be a practical benefit conferred to the
promisor even though the promisee was obliged to fulfil a pre-existing contractual duty.

1
Lush J. in Currie vs. Misa (1875) LR 10 Ex 153,160

2
Williams vs. Roffey Bros. & Nicholls (Contractors) LTD. [1991] 1 QB 1
CASE HISTORY

Stilk3, a case ruled over 200 years ago, establishes that agreements cannot be altered without the
provision of fresh consideration to underpin the promise and contractually bind the parties. The
foundations of the pre-existing duty rule are in many ways linked to this case, where a crew of
11 sailors agreed to sail to the Baltic and back for a wage of £5 each per month. The return
voyage was in peril as two crew members deserted the rest of the party; the captain requested the
remaining crew members to handle the excess workload for which the wages of the two crew
members would be divided between the remaining members. The return voyage was successful;
however, the captain refused to pay. The Crew members filed a suit seeking the payment of
additional wages, but in vain. The court ruled in favor of the captain, citing the lack of
consideration for the captain's promise as the primary reason for the decision. According to the
original contract, the sailors were obliged to sail home safely, and hence their pre-existing duty
did not serve as fresh consideration for the promise. Lord Ellenborough goes on to elaborate that
the sailors were contractually obliged to do anything necessary, which included, if need be,
taking up the workload of the deserters. Therefore, there was nothing presented in return for the
increase in their wages, and the agreement was void for want of consideration, thereby the
promise of more fees for the same work was considered invalid. However, the decision in Roffey4
did not overrule Stilk5 with Glidewell LJ going as far as stating that his intention was not to
‘contravene the principle in Stilk vs. Myrick,’ but to ‘refine, and limit the application of that
principle, but they leave the principle unscathed.’6

3
Stilk vs Myrick (1809) 170 ER 1168

4
Ibid 2

5
Ibid 3

6
Ibid 2
Roffey Bros were contractors who had been engaged by Shepherds Bush Housing Association
Ltd to refurbish a block of 27 flats at Twynholm Mansions. The contract also specified that a
penalty was due in case the project was not completed in time. Roffey Bros entered into a sub-
contract with Lester Williams to perform the work of a carpenter for £20,000. A part of the work
had been completed, and Roffey Bros had paid him £16,200. Before the job was finished, Lester
Williams ran into financial difficulties for two reasons: first, the price for the carpentry work was
too low, and second, he failed to supervise his workmen adequately. To avoid further hassles and
the late penalty, the Roffey Bros agreed to pay an extra £575 for each flat completed. William
completed eight flats; however, due to lapses in payment, he walked off and brought legal action
against Roffey Bros to enforce the payment of the extra sum. It was decided that there was good
consideration for the promisor to pay an extra sum of £575 per flat and the contractual right of
Lester Williams is upheld. The court reasoned that William continued to work as long as the
payment was provided, hence he had not breached the contract, moreover, his continuance
ensured that the Roffey Bros did not have to go through the trouble of sub-contracting other
people for the carpentry and could avoid the penalty for delay. The judgement delivered by
Glidewell L.J paved the way to the practical benefit test, which until that point was not
considered to be a good consideration. His concluding statements sought to inspect the aspects of
a ‘practical benefit’ that the promisor has obtained and not just the ‘legal benefits.’ However, the
extent to which practical benefit provides any additional value or benefit besides that which is
already within the bounds of the contract is something that requires further assessment.

JUDICIAL APPLICATION AND ANALYSIS OF “PRACTICAL BENEFIT”

The practical benefits such as continued performance and avoiding the hassles of finding a
substitute are both already owed to Roffey under the pre-existing contract, and avoiding the late
penalty is merely a consequential result of the two. Hence, it is difficult to perceive any actual
consideration for the additional sum that was to be paid. Roffey7 established that even though
consideration was a must, it need not comprise anything additional to what is already
contractually owed by the promisor to the promise , nor is an additional detriment/benefit

7
Ibid 2
necessary. Practical benefit moving from the promisee to the promisor is sufficient and hence the
promise for payment of additional sums was an enforceable contract. The addition of ‘practical
benefits’ heralds a change in terms of redefining certain boundaries of contractual liabilities.
There are two advantages that practical benefit confers as observed in Roffey8; firstly, it is the
increased chance of contractual performance which is already owed to the promisor as opposed
to the need to seek a legal remedy over non-performance, and secondly, it may be possible to
attain additional benefits from the promisee’s already due performance other than what may be
stipulated in the contract. One aspect that remains consistent in Glidewell L. J’s test for
consideration is for the promisor to have ‘reason to doubt whether A (the promisee) will, or will
be able to, complete his side of the bargain’ 9. In such a scenario, the possibility to secure a better
chance of fulfilment of the contractual agreement by payment of additional amounts is seen as a
practical benefit over resorting to the legal remedies for specific performance, which may be
unsatisfactory. The consideration for the additional payment may not be added to what is
expressly stipulated in the contract; it may only be added to the possible consequential losses that
may arise as a result due to a likely breach of contract. Purchas LJ goes on to say that this
practice implies that ‘a contracting party can rely on his own breach to establish consideration’ 10.
Thus, practical benefit entails the promisor with the same benefit that the completion of the
original contract would have provided him. In the words of Professor Coote, practical benefit
‘provides nothing that is not already the promisor’s right. It could constitute fresh consideration
only if the law were to recognize some break-in link between a contract and its performance
which is inherent in the concept of enforceable legal obligation’11.

8
Ibid 2

9
Roffey [1991] 1 QB at 15.

10
Roffey [1991] 1 QB 1, 23B

11
B Coote, 'Consideration and benefit in fact and law'(1990-91) 3 JCL, 28.
Another sense of the application of practical benefit, as previously mentioned, is to avail
additional benefits in addition to what was stipulated in the contract. The AnanAngelas
Compania Naviera SA vs Ishikawajima-Harima Heavy Industries Co Ltd (‘Anagel’) is a case
where this benefit is illustrated. The defendant in this case, is a shipbuilder who had to face
severe adversities during a recession period in the shipping industry, amidst threats of
cancellations and seeking delays in delivery by the buyers the defendant offered various
concessions to accept timely delivery like plaintiffs were contractually bound to do. Applying
Roffey12, Hirst J held that ‘that the concessions were supported by practical benefit as it was
‘conclusively demonstrated’ that the defendants’ main objective ‘was to make sure that the
plaintiffs, whom they described as their ‘core’ customers, did indeed take delivery … to
encourage their other reluctant customers to follow suit.’13

The need for better structuring may imply that three limits are conferred to ‘practical benefit’.
Firstly, the courts may examine whether there is a clear intention by the promisor to bargain for
practical benefit. This is observed in the cases of both Roffey14 and Anagel15 the promisor in both
these instances clearly expressed the practical benefit that they were hoping to attain. Secondly,
the actual risk of failure of completion or non -performance must be considered, and lastly, the
benefits of a sentimental nature may be excluded. The imposition of such a limit will ensure that
the benefit is commercial. (Both Roffey and Anangel involved commercial transactions).
However, problems arise when promises which lack legal value seek enforceability under the
guise of practical benefit, as in Pitt Vs. PHH Asset Management Ltd ([1994] 1 WLR 327) where
the consideration provided by the plaintiff to the defendant (Property owner) was the revocation
of a threat to cause problems for the defendant by telling a third party that the plaintiff was no
longer interested in the property thereby depreciating its price . To accept such acts of nuisance,
done in bad faith under the ambit of ‘practical benefits’ and allowing it to serve as consideration
will encourage abuse of the judicial process. Another aspect is that, if avoiding the expense of
time, money, and the hassles of substituting and suing, etc., all fall within the expanse of
‘practical benefit’, it will be extremely difficult for the court to enforce strict limitations as any

12
Ibid 2
13
Anagel, [1956] 1 WLR 544).
14
Ibid 2
15
Anangel Atlas Compania Naviera SA vs Ishikawajima-Harima Heavy Industries Co (No.1) [1990] 1 Lloyd's Rep.
167
motive or desire of promisor can be claimed to be a practical benefit. Since the ruling in Roffey16
is far from flawless, it has not gained much acceptability, as seen in the case of Re Selectmove
Ltd (EWCA Civ 8, 1 WLR 474). Re Selectmove Ltd entered into negotiations with the Inland
Revenue concerning the payment of taxes owed; at the end of which they were allowed to pay
off their tax debts in the form of installations. However, just as the company had started paying
in instalments, they were contacted by Inland Revenue, insisting that all the arrears of taxes were
to be paid immediately otherwise, it would commence legal action against them. Re Selectmove
Ltd company contested that Roffey17 was authority for the proposition that "promising to perform
an existing obligation could amount to good consideration, provided that promise obtained a
practical or factual benefit."18 And that the company had given practical benefit in the form of
increased likelihood of repayment of debt as , Inland revenue stands to earn more from not
enforcing its debt against the company which was known to be in financial difficulties, than by
forcing the company into liquidation. Peer Gibson LJ had identified that the principle of the case
was parallel to that of Roffey. However, consideration in the form of a practical benefit was
expressly rejected in the case of Foakes Vs Beer ((1884)9 App Cas 605("Foakes").

In this case, Dr. Foakes was liable to pay Mrs. Beer a sum of money as the result of a court
judgement. Foakes was unable to pay the amount in a single full payment, and hence, signed an
agreement with Beer to pay the amount in the form of instalments. However, the agreement did
not mention any interest that was to be paid by Foakes. After the principal sum was paid in full,
Beer started legal proceedings against Foakes to retrieve the interest payments. Foakes argued
that the variation in the contract implied that he need not pay the interest amount, however, Beer
maintained that the contract was not enforceable, because Foakes had provided no consideration.
The House of Lords decided in favour of Beer.

Therefore, there were two contradictory authorities that the court had to look into, to decide Re
Selectmove19. In Foakes20 the agreement to accept partial payment of a debt in discharge to the

16
Ibid 2
17
Ibid 2

18
Ibid 2

19
Ibid 19
20
Foakes Vs Beer ((1884)9 App Cas 605
full amount was held to be invalid due to lack of consideration, whereas in Roffey21 practical
benefit was held to be a good consideration. Re Selectmove22 contested that Inland Revenue
obtained a practical benefit by allowing them to pay in instalments, as this makes the payment of
the full amount feasible. The court ruled in favour of Inland Revenue and accepted Foakes23 as
the binding authority. Peter Gibson LJ expressed that Roffey24 went against a well-established
principle, and that if the court accepted the principle in Roffey, it would leave Foakes25 without
any application. He believed that any extension, if needed, was to be made by the ‘House of
Lords, or more appropriately, by the Parliament after consideration by the Law Commission.’
This case in many ways demonstrates that the application of Roffey has in no way been
systematic. However, this is not just pertinent to this case alone; it is characteristic of common
law to expand and build upon a central core on a case-to-case basis rather than outrightly
following and conforming to a central idea.

CONCLUSION

From all the insights, it is clear that the decision in Roffey26 challenges the long-standing
principle established in Stilk27. However, upon closer inspection, it may be observed that the
facts and circumstances of the two cases are quite different. It may be averred that in Stilk,28 the
promisor did not derive any benefit or that the promise was gratuitous. However, a better line of
reasoning was provided by Purchas LJ when he goes on to say that in today's scenario Stilk29
would be recognised as a case of economic duress. Whereas in Roffey30it was held that the
additional payments did yield extra benefits such as avoiding a penalty for the late completion of
the work as the plaintiff continues to engage in the work. It also averted the hassles of
subcontracting another carpenter as a replacement to complete the subcontracted work. Through
this case, it is evident that the additional benefit in the form of a promise to complete the
contracted work was economically more imperative for the defendant than a right to sue for

21
Ibid 2
22
Ibid 19
23
Ibid 21
24
Ibid 2
25
Ibid 21
26
Ibid 2
27
Ibid 3
28
Ibid 3
29
Ibid 3
30
Ibid 2
specific performance. This led to what Russell LJ called ‘a pragmatic approach to the true
relationship between the parties.’31 Even though the court adopts a flexible approach to
consideration in Roffey32, it reiterates the fact that gratuitous promise remains unenforceable. The
judges in Roffey33 chose to look at the concept of consideration from a different angle and depart
from the traditional judicial rhetoric on consideration, which is based on an exchange model. In
this case, judges considered both fairness and commercial utility; the court recognized that the
enforceability of the defendants' promise was a commercial necessity and hence acted on it.

The court in ,William Vs Roffey took the bold step of moving beyond the notion that the
promise to perform any duty must simply be categorized as an illusory promise and goes on to
examine whether based on the circumstantial facts of a case , there was a promise of an act
requested by the defendant promisor which if performed by the plaintiff promisee would confer a
benefit on the promisor. Such an approach may not be a novelty, it is however a much needed
refinement to the traditional doctrine of consideration and one which helps to understand and
better adapt to modern-day transactions and agreement, as it offers a horizon beyond the
traditional benefit-detriment approach to contracts.

ME NOTE

Very well-written article. It clearly shows that you have really read and analyzed the case very
well and thought about all the important “features” of this case. After reading the case myself, it
is clear that you have understood the intricacies of the case. Only things to consider overhauling
here is the structure of the whole case comment. There are long paragraphs and long sentences
everywhere and the punctuation is off. The citations also need to be in bluebook format and not
how you have done it throughout the paper. Please read the comments of all editors and the case
comment will look and feel more complete.

31
Ibid 2([1990] 1 All ER 512, 524.)
32
Ibid 2
33
Ibid 2