Also known as: Williams v Roffey Bros & Nicholls (Contractors) Ltd
Court: Court of Appeal (Civil Division)
Judgment Date: 23 November 1989
Where Reported: [1991] 1 Q.B. 1; [1990] 2 W.L.R. 1153; [1990] 1 All E.R. 512
Legal Issues in Williams v Roffey Bros
Williams v Roffey Bros & Nicholls (Contractors) Ltd addresses the principle of consideration in contract modifications.
Williams v Roffey Bros examined whether additional payments promised to a subcontractor, for work already contractually obligated, can constitute valid consideration.
The legal question was whether such promises, aimed at ensuring timely completion of work, are enforceable without fresh consideration.
Material Facts in Williams v Roffey Bros
Williams, a subcontractor, agreed to complete carpentry for Roffey Bros in 27 flats for £20,000. Facing financial difficulties, Williams struggled to complete the work.
Roffey Bros, concerned about potential penalties for late completion, orally agreed to pay an additional £10,300 to Williams, at a rate of £575 per flat, on timely completion.
Despite this, Williams was paid only £1,500 more and stopped working. Williams sued for the remaining promised amount. Roffey Bros argued the additional payment lacked consideration as Williams was already contractually bound to complete the work.
Judgment in Williams v Roffey Bros
The Court of Appeal ruled in favour of Williams, finding the additional promise enforceable. The court held that the extra payment constituted valid consideration because it offered practical benefits to Roffey Bros.
These benefits included avoiding penalties for delay and the inconvenience of finding another contractor. The court distinguished this case from Stilk v Myrick, emphasising the commercial context and the benefits accruing to the promisor.
The Reason for the Decision in Williams v Roffey Bros
The court’s decision hinged on the concept of consideration in contract law. Traditionally, performing an existing duty could not constitute valid consideration for a new promise – see Eastwood v Kenyon (1840).
However, in this case, the court identified practical benefits to Roffey Bros from the new agreement, including timely completion and avoidance of penalties.
This decision signified a shift from a strict interpretation of consideration. The court recognised that commercial realities often necessitate contract modifications.
If such modifications are beneficial for the party making the new promise, they can provide valid consideration, even if the other party is simply fulfilling an existing duty.
The court also considered the broader implications of its ruling. Recognising that rigid adherence to traditional principles of consideration could hamper commercial flexibility, the court sought to align legal principles with commercial practices.
This approach facilitated the smooth functioning of contracts by allowing for adjustments in response to changing circumstances without necessitating the creation of entirely new contracts.
The judgment also emphasised that the additional promise was not made under duress or fraud, ensuring that the agreement was a result of genuine commercial negotiation.
Conclusion
Williams v Roffey Bros & Nicholls (Contractors) Ltd is a landmark case in contract law, especially in the context of contract modifications and consideration.
The decision reflects a pragmatic approach to contract law, acknowledging that commercial realities often necessitate flexible interpretations of traditional legal principles.
This case has significant implications for contractual relationships, particularly in construction and similar industries, as it allows parties to modify contracts for mutual benefit without the need for new consideration, provided the modifications are not made under duress or fraud.
