Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991] 1 QB 1 established the “practical benefit” refinement to the rule on consideration, allowing performance of a pre-existing contractual duty to count as good consideration in certain circumstances.
Facts of the Case
The defendants, Roffey Bros, were main contractors for the refurbishment of 27 flats and subcontracted the carpentry to the plaintiff, Lester Williams, for a lump sum of £20,000. After completing the roof and nine flats, Williams ran into financial difficulty because the price was too low to be profitable and he had not supervised his workmen adequately. Roffey Bros were concerned because their own main contract contained a penalty clause for late completion.
On 9 April 1986, the defendants proposed to pay a “bonus” of an additional £10,300 (£575 per flat) to ensure Williams continued and finished on time. Williams substantially completed eight more flats, but Roffey Bros made only one further payment of £1,500 before he ceased work. Williams sued for the promised additional payments.
The move away from the strict rule in Stilk v Myrick
The central hurdle was the 1809 rule in Stilk v Myrick: a promise to perform a pre-existing contractual duty is not good consideration, because the promisee provides nothing new. The Court of Appeal noted that Stilk was decided during the Napoleonic wars under “extraordinary conditions”, where there were strong policy grounds to protect ship masters from being “held to ransom” by crews mid-ocean. The core principle of Stilk — that a gratuitous promise remains unenforceable — is still valid, but should be refined and limited for the modern era, with the protection it once provided now better handled by the doctrine of economic duress.
The lack of duress and the defendants’ initiative
The most critical distinguishing factor was that the agreement was reached without illegitimate pressure: the initiative came entirely from the defendants, who realised that underpricing the subcontract was contrary to their own interests. As Purchas LJ observed, the question of duress did not arise, the initiative having come from the defendants’ surveyor rather than the plaintiff. Because the company itself suggested the extra payment to secure its commercial position, it could not later claim coercion — which allowed the court to look for “practical benefits” capable of amounting to consideration.
Key Legal Principles and Findings
The court established the “practical benefit” test, formulated by Glidewell LJ: performance of an existing duty can count as consideration if —
- A is in a contract with B to provide goods or services;
- B has reason to doubt that A will complete their side of the bargain;
- B promises A an additional payment to ensure on-time performance;
- B obtains a practical benefit or obviates a disbenefit (e.g. avoiding a penalty clause or the expense of finding a new subcontractor);
- B’s promise is not given as a result of economic duress or fraud.
The court found Roffey Bros received several practical benefits: avoiding the penalty clause, avoiding the “trouble and expense” of engaging new carpenters, and replacing a “haphazard” payment method with a more formal system.
Academic Discussion and Implications
- Shifting legal focus: Williams shifts the protection of promisors from the “lack of consideration” hurdle to the “economic duress” defence.
- “Practical” vs. “legal” benefit: it is controversial because it prioritises factual benefits over the traditional requirement of legal detriment; critics argue this strains the rule that consideration must move from the promisee, as Williams was only doing what he was already bound to do.
- The “bird in the hand” rationale: Professor Chen-Wishart suggests the case can be viewed as a collateral unilateral contract — Roffey Bros promised to pay more if and when Williams actually performed, recognising that performance is often more valuable than a mere right to sue.
- Conflict with debts: the rule has not been extended to part-payment of debts (Foakes v Beer), creating an inconsistency where a promise to “pay more” for services is enforceable but a promise to “accept less” of a debt is not.