Through case law it is quite transparent that the doctrine of consideration is not always one of easy application to circumstances in court. The 1809 case of Stilk v. Myrick explored an element of consideration; performance of a contractual duty owed to the promisor, and made it clear that it was not good consideration. This precedent was set, established and exercised for the next 147 years until it was challenged in Ward v. Byham in 1956. Lord Denning in Ward v. Byham went against the general rule and claimed that performance of an existing contractual duty did provide sufficient consideration. The doctrine then remained unchallenged and not considered to have ‘receded in importance’ until the turning point case of Williams v. Roffey Bros and Nicholls (Contractors) Ltd. This case broke down the precedent of all previous cases as it was held that performance of an existing contractual duty was good consideration, and the pragmatic approach by the courts introduced the concept of the promisor gaining a “practical benefit”. Although this case concerned the re-arrangement of the contract originally decided it still stood significant in its ability to go against the general doctrine. The aforementioned quote from Lord Denning did highlight the importance of ‘public interest’ and the facts of this case indicate it was in the interest of public that the claimant was successful due to components of the case such as him under pricing the job in question. In a lay persons mind this ignites thoughts of unfairness and questions the intent of the defendants as to whether they were aware of this under pricing. Williams v. Roffey provided breeding ground for arguments that consideration was no longer required in the law of contract and other existing doctrines such as intention to create legal relations, economic duress and promissory estoppel were capable of deciding the enforceability of a promise or representation.
In his article of 1991 Phang takes the view that the decision of Williams v. Roffey shows ‘that the requirement of consideration either be modified or abolished’. Phang highlights the view of Halson that ‘the principles of economic duress offer a more sophisticated means of distinguishing extorted and non-extorted modifications’ but unlike Halson states that the doctrine of economic duress is in its ‘infancy’. The author goes on to explore attempts of ‘moral’ and ‘technical’ consideration before exclaiming that promissory estoppel is the only doctrine ready to supplement the gaps in consideration. Phang appreciates Halson’s acknowledgement of economic duress as a ‘logical substitute for consideration’ but stresses the doctrine ‘is in need of more concrete and workable guidelines’, claiming use of economic duress instead of consideration would be ‘substituting one vague doctrine for another’. This implies that Phang agrees with Lord Steyn’s statement in relation to the fact that ‘great legal challenges should only be embarked upon when they are truly necessary’ as he acknowledges the doctrine of economic duress as only adequate enough to supplement consideration but not replace it meaning consideration still upholds some importance, but as Steyn refers to that importance has ‘receded’.
Blair and Hird explore the idea that the legal change referred to by Steyn should be addressed by the legislature. The authors explain that despite consideration and its effectiveness being an issue the legislature are in ‘no hurry to address this issue’. This agrees with Lord Steyn’s statement that the change should only take place when ‘truly necessary’. Yet alternatively they argue that that the decision in Williams v. Roffeydid not indicated that the doctrine of consideration should be replaced but that it highlighted it as a ‘fundamental part of contract law’. Additionally, Blair and Hird further explain that suggestions of replacing consideration with the intentions to create legal relations doctrine would not satisfy the needs of business relationships as intention is not a great concern in commercial contracts. This relates to Steyn’s view that in order to meet ‘the needs of modern commerce’ the use of consideration should not be stopped but adapted to lead to practical justice that is fair and satisfying to the victim of the situation.
To conclude, despite the flaws of the doctrine of consideration its purpose still remains ‘fundamental part of contract law’, ensuring that enforceability is fair, just and more recently practically just. The inconsistency of case law has indicated a need for reform but not to the extent that the doctrine should be replaced.
McKendrick E, Contract Law, 7th edn., (Basingstoke : Palgrave Macmillan, 2007) p.128
[1809] 2 Camp 317 Facts: C, a seaman (Stilk) agreed with D (Myrick) to be paid a total of £5 per month to sail to the Baltic and back. 2 of the original 11 men left the trip part way through the voyage and after they could not be replaced the remaining crew members agreed with the master to continue the voyage if the wages of the 2 men who left were shared amongst them. On their return Stilk was refused payment. HELD: claim unsuccessful. In one case because his claim was unreasonable for performing a contractual duty and in the other because there was not any consideration transferred by Stilk to the master as he carried out what he was already contractually obliged to do.
[1956] 1 WLR 496 Facts: D, the father of a child, promised the mother that he would pay £1 per week child maintenance, if the mother could prove that the child in question was well looked after and happy. When the mother tried to enforce this due to termination of payments the father attempt to claim that there was not any consideration for the promise. Held: Father’s argument was unsuccessful on the grounds that he gained a benefit.
McKendrick E, Op Cit, p.94, “a promise to perform an existing duty is, I think, sufficient consideration to support a promise, so long as there is nothing in the transaction which is contrary to the public interest”
Steyn J, ‘Contract Law: Fulfilling the Reasonable Expectations of Honest Men’ (1997) 113 LQR 433, 437
[1990] 2 W.L.R. 1153 Facts: Williams, a carpentry sub-contractor, underpriced a job with the defendants and so a subsequent agreement took place between the two parties for Williams to receive more money for the job. Court held that completing an existing contractual duty was good consideration and so the promise was enforceable.
McKendrick E, Op Cit, p.98
Williams v. Roffey Op Cit.
Chandler A and Brown I, Law of Contract, 6th edn., (New York: Oxford University Press, 2007) p.46-49
Williams v. Roffey Op Cit.
Phang L B A, ‘Consideration at the crossroads’, (1991) L.Q.R., 107(Jan), 21-24 p.1
Halson R, ‘Sailors, sub-contractors and consideration’, (1990) L.Q.R., 106(Apr), 183-185
Hooley R, ‘Consideration and the existing duty’, (1991), p.8
Williams v. Roffey Op Cit.
Blair A and Hird J N, ‘Minding your own business – Williams v. Roffey re-visited: consideration re-considered’, (1996), JBL, p.4