Contract Law - "The decision of the Court in Williams v Roffey Bros. [(1991) 1 QB 1, Court of Appeal].

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Contract Law. First assessed essay.

“The decision of the Court in Williams v Roffey Bros. [(1991) 1 QB 1, Court of Appeal] which suggests that performance of an existing (contractual) duty can constitute consideration where it results in ‘practical benefit’ to the promisor creates further ambiguity in the scope of consideration in English contract law.”

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Consideration is the essential part of the contract that comprises a legal agreement. English law requires that in all contracts other than those by deed both parties have to bring something to the agreement i.e. provide consideration to the bargain according to the “benefit - detriment” scheme. This aspect is explained by Sir Fredrick Pollock’s definition in Dunlop v. Selfridge: "An act of forbearance of one party, or the promise thereof, is the price for which the promise of the other is brought, and the promise thus given for value is enforceable." One of the fundamental judicial rules relating to it is that the performance of already existing contractual duty owed to the promisor is not sufficient consideration (based on Stilk v. Myrick).

However, in Williams v. Roffey Bros., quite unusual interpretation was expounded by the Appeal Court judges, putting thereby the classical doctrine of consideration under strain. It was held that where a party (Roffey Bros.) to an existing contract later agrees to pay an extra supplement in order to ensure that the other party (Williams) performs his duties under the contract, then that agreement is binding. If the party agreeing to pay the bonus, it has thereby obtained some new ‘practical benefit’ or avoided a disadvantage. In the present case there were number of evident benefits to Roffey including (a) making sure Williams continued his work, (b) avoiding payment under a damages clause of the main contract if Williams was late, and (c) avoiding the expense and trouble of getting someone else.

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One of the most controversial problems of such conclusion is derived from the disputes on overruling the Stilk case, which served as a leading case in this field for almost two centuries. Furthermore, this issue assumes the failure to refer on the superior authority (House of Lords) decision in Foaks v. Bear, upon which Stilk relied. In both Williams and Stilk, the defendants required reassurance that existing duties would be performed. The decisions upon such similar scenarios appeared to be opposed at first glance. All three Williams’ judges, however, pointed out an approval of the Stilk’s principle. These are the words ...

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