From here, we can investigate the case of Williams v Roffey Bros & Nichols (1990) and decide whether valuable consideration has been given. The facts of this case involved two parties; the plaintiff subcontractors undertook to carry out certain carpentry work for a main contractor who was refurbishing a block of twenty - seven flats. However the defendant builder feared that delay might be caused on part of the plaintiff subcontractors and this would mean bad news for the defendant as he would consequently be made liable to pay liquidated damages under the main contract. Soon the builders found that the carpenters were in financial difficulty, unable to obtain materials and unable to finish the work, the builder offered extra money to ensure that the work was completed on time according to the agreement. In turn, the builders thus avoided paying a penalty under a liquidated damages clause. However, whilst the carpenters continued the work, the builders failed to pay, so the carpenters sued to recover the money promised in the new agreement. The defendant builder contended that the plaintiff had provided no consideration to support the promise to pay the extra money and he also argued that the condition of completing the work on time was part and parcel of the contract and so the plaintiff had done no more than he was already contractually bound to do under his contract with the builder.
However the Court of Appeal held that the carpenter should succeed as the builder himself made a choice to pay the extra money. The courts also concluded with the fact that the builder had obtained certain benefits for himself such as avoiding the inconvenience of having to find new carpenters and he also avoided the disadvantage of having to pay a penalty to the owners of the building. The courts found that effective consideration had been given by the builder as he promised to pay additional money and so the promise was accordingly binding.
The decision made in this case is contrary to the decision in the earlier case of Stilk v Myrick (1809) where it was emphasised that performance of an existing contractual duty does not constitute as consideration. In other words, if a person has already made a contract to do something, this same duty cannot be used again as consideration to the same person. In Stilk v Myrick two sailors had deserted a ship during a journey to the Baltic. Eight of the sailors who were left agreed with the captain to share the wages of the deserters between them in exchange for sailing the ship back to shore without the effort of the other two sailors. On arrival at the port the money was not paid and so the sailors sued the captain. It was held that the sailors had no more than their contractual duty, and this duty was already owed to the captain in their first agreement to sail the ship. In this situation, there may have been a certain amount of sympathy with the captain of the ship as he was trying to recruit sailors in difficult circumstances. However the was decision was reversed in the later case of Hartley v Posonby (1857). Here 17 sailors deserted a ship out of a crew of 36 sailors. From the sailors left, only a few of them were experienced seamen. A similar agreement was made with the captain to share the wages of the deserters. This was to be shared between the eight sailors remaining if the ship was to be sailed on short - handed, and this was considered a dangerous thing to do. On return, the payment was not made and so the courts held that the sailors had gone beyond their existing duty and they were entitled to the money promised. In this case, the courts probably recognised that sailing on the ship would be taking a dangerous risk, with the fact that most of the sailors had deserted, making it harder for the remaining sailors to handle the ship.
However, the case of Williams v Roffey has caused a huge amount of discussion in the legal world, mainly because it goes against the traditional requirement of consideration and this can be seen by the facts of the case. The carpenters were due to complete the flats by a certain date in their original contract with the builders. They then further bargained with the builders, saying that they would complete by that date only if more money was paid to them. From noticing this, it could be argued that the carpenters could be seen to be doing no more than their original duty, but merely using that as an excuse so they could have more money. On the other hand, it could be argued that the builders had made a calculated choice in agreeing to pay the carpenters so they could avoid paying the extra money to the owners under a penalty clause - this can be seen as a practical benefit to the builders. This case is an example of the courts making a real effort to consider commercial realities and the difficulties the parties face when they are in financial crisis, especially in the context of recession in their trade. However, the courts have been reluctant to extend the principle any further and this was seen in Re Selectmove (1995). In this case the courts refused to apply the argument in Roffey to the rule of part payment of debt. The case involved the Inland Revenue and an arrangement took place to pay the Inland Revenue in instalments, but a claim was made that interest should not be payable as the Inland Revenue had the practical advantage of not having to go any further trouble to recover the debt and so they saw it as a shortcut to gain the money. However it was held that this was a policy decision since it involved payment to Inland Revenue and not an individual - therefore the policy had to be followed.